Correlation Between Wynn Resorts and Becle SAB

Can any of the company-specific risk be diversified away by investing in both Wynn Resorts and Becle SAB at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wynn Resorts and Becle SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wynn Resorts Limited and Becle SAB de, you can compare the effects of market volatilities on Wynn Resorts and Becle SAB and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wynn Resorts with a short position of Becle SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Resorts and Becle SAB.

Diversification Opportunities for Wynn Resorts and Becle SAB

-0.02

Correlation Coefficient

Wynn Resorts  Becle SAB

Good diversification

The 3 months correlation between Wynn and Becle is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and Becle SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becle SAB de and Wynn Resorts is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wynn Resorts Limited are associated (or correlated) with Becle SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becle SAB de has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and Becle SAB go up and down completely randomly.

Pair Corralation between Wynn Resorts and Becle SAB

Assuming the 90 days trading horizon Wynn Resorts Limited is expected to generate 0.75 times more return on investment than Becle SAB. However, Wynn Resorts Limited is 1.33 times less risky than Becle SAB. It trades about -0.03 of its potential returns per unit of risk. Becle SAB de is currently generating about -0.16 per unit of risk. If you would invest  179,517  in Wynn Resorts Limited on December 21, 2024 and sell it today you would lose (9,517) from holding Wynn Resorts Limited or give up 5.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Wynn Resorts Limited  vs.  Becle SAB de

Wynn Resorts Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wynn Resorts Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Wynn Resorts is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Becle SAB de

Risk-Adjusted Performance

Very Weak

Over the last 90 days Becle SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Wynn Resorts and Becle SAB

The main advantage of trading using opposite Wynn Resorts and Becle SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Resorts position performs unexpectedly, Becle SAB can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Becle SAB will offset losses from the drop in Becle SAB's long position.

The idea behind Wynn Resorts Limited and Becle SAB de pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.