Correlation Between Wynn Resorts and Galaxy Entertainment

Can any of the company-specific risk be diversified away by investing in both Wynn Resorts and Galaxy Entertainment 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 Galaxy Entertainment 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 Galaxy Entertainment Group, you can compare the effects of market volatilities on Wynn Resorts and Galaxy Entertainment 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 Galaxy Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Resorts and Galaxy Entertainment.

Diversification Opportunities for Wynn Resorts and Galaxy Entertainment

0.0

Correlation Coefficient

Wynn Resorts  Galaxy Entertainment

Pay attention - limited upside

The 3 months correlation between Wynn and Galaxy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and Galaxy Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Entertainment 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 Galaxy Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Entertainment has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and Galaxy Entertainment go up and down completely randomly.

Pair Corralation between Wynn Resorts and Galaxy Entertainment

If you would invest  9,297  in Wynn Resorts Limited on September 15, 2024 and sell it today you would earn a total of  50.00  from holding Wynn Resorts Limited or generate 0.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Wynn Resorts Limited  vs.  Galaxy Entertainment Group

Wynn Resorts Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wynn Resorts Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Wynn Resorts displayed solid returns over the last few months and may actually be approaching a breakup point.

Galaxy Entertainment

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Galaxy Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Galaxy Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Wynn Resorts and Galaxy Entertainment

The main advantage of trading using opposite Wynn Resorts and Galaxy Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Resorts position performs unexpectedly, Galaxy Entertainment 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 Galaxy Entertainment will offset losses from the drop in Galaxy Entertainment's long position.

The idea behind Wynn Resorts Limited and Galaxy Entertainment Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.