Correlation Between Wynn Resorts and Sands China

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

Diversification Opportunities for Wynn Resorts and Sands China

0.29

Correlation Coefficient

Wynn Resorts  Sands China

Modest diversification

The 3 months correlation between Wynn and Sands is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and Sands China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sands China 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 Sands China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sands China has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and Sands China go up and down completely randomly.

Pair Corralation between Wynn Resorts and Sands China

Assuming the 90 days horizon Wynn Resorts Limited is expected to generate 0.79 times more return on investment than Sands China. However, Wynn Resorts Limited is 1.27 times less risky than Sands China. It trades about -0.03 of its potential returns per unit of risk. Sands China is currently generating about -0.13 per unit of risk. If you would invest  8,409  in Wynn Resorts Limited on December 28, 2024 and sell it today you would lose (452.00) from holding Wynn Resorts Limited or give up 5.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Wynn Resorts Limited  vs.  Sands China

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. Despite nearly stable basic indicators, Wynn Resorts is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sands China

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sands China has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Wynn Resorts and Sands China

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

The idea behind Wynn Resorts Limited and Sands China 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.