Correlation Between Wynn Resorts and MakeMyTrip

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

Diversification Opportunities for Wynn Resorts and MakeMyTrip

-0.39

Correlation Coefficient

Wynn Resorts  MakeMyTrip

Very good diversification

The 3 months correlation between Wynn and MakeMyTrip is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and MakeMyTrip Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MakeMyTrip Limited 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 MakeMyTrip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MakeMyTrip Limited has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and MakeMyTrip go up and down completely randomly.

Pair Corralation between Wynn Resorts and MakeMyTrip

Given the investment horizon of 90 days Wynn Resorts Limited is expected to under-perform the MakeMyTrip. But the stock apears to be less risky and, when comparing its historical volatility, Wynn Resorts Limited is 1.08 times less risky than MakeMyTrip. The stock trades about -0.05 of its potential returns per unit of risk. The MakeMyTrip Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  10,873  in MakeMyTrip Limited on September 23, 2024 and sell it today you would earn a total of  227.00  from holding MakeMyTrip Limited or generate 2.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Wynn Resorts Limited  vs.  MakeMyTrip Limited

Wynn Resorts Limited

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wynn Resorts Limited are ranked lower than 5 (%) 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.

MakeMyTrip Limited

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MakeMyTrip Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MakeMyTrip is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Wynn Resorts and MakeMyTrip

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

The idea behind Wynn Resorts Limited and MakeMyTrip Limited 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 Global Correlations module to find global opportunities by holding instruments from different markets.