Correlation Between Whirlpool and Wynn Resorts
Can any of the company-specific risk be diversified away by investing in both Whirlpool and Wynn Resorts 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 Whirlpool and Wynn Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whirlpool and Wynn Resorts Limited, you can compare the effects of market volatilities on Whirlpool and Wynn Resorts 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 Whirlpool with a short position of Wynn Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whirlpool and Wynn Resorts.
Diversification Opportunities for Whirlpool and Wynn Resorts
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Whirlpool and Wynn is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Whirlpool and Wynn Resorts Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Resorts Limited and Whirlpool 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 Whirlpool are associated (or correlated) with Wynn Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wynn Resorts Limited has no effect on the direction of Whirlpool i.e., Whirlpool and Wynn Resorts go up and down completely randomly.
Pair Corralation between Whirlpool and Wynn Resorts
Considering the 90-day investment horizon Whirlpool is expected to under-perform the Wynn Resorts. In addition to that, Whirlpool is 1.33 times more volatile than Wynn Resorts Limited. It trades about -0.33 of its total potential returns per unit of risk. Wynn Resorts Limited is currently generating about -0.21 per unit of volatility. If you would invest 10,599 in Wynn Resorts Limited on February 6, 2024 and sell it today you would lose (928.00) from holding Wynn Resorts Limited or give up 8.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whirlpool vs. Wynn Resorts Limited
Performance |
| Timeline |
| Whirlpool |
| Wynn Resorts Limited |
Whirlpool and Wynn Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whirlpool and Wynn Resorts
The main advantage of trading using opposite Whirlpool and Wynn Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whirlpool position performs unexpectedly, Wynn Resorts 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 Wynn Resorts will offset losses from the drop in Wynn Resorts' long position.| Whirlpool vs. Tempur Sealy International | Whirlpool vs. La Z Boy Incorporated | Whirlpool vs. MasterBrand | Whirlpool vs. Ethan Allen Interiors |
Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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