Correlation Between Wynn Resorts and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both Wynn Resorts and Vipshop Holdings 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 Vipshop Holdings 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 Vipshop Holdings Limited, you can compare the effects of market volatilities on Wynn Resorts and Vipshop Holdings 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 Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Resorts and Vipshop Holdings.
Diversification Opportunities for Wynn Resorts and Vipshop Holdings
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wynn and Vipshop is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings 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 Vipshop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vipshop Holdings has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and Vipshop Holdings go up and down completely randomly.
Pair Corralation between Wynn Resorts and Vipshop Holdings
Given the investment horizon of 90 days Wynn Resorts Limited is expected to generate 0.8 times more return on investment than Vipshop Holdings. However, Wynn Resorts Limited is 1.24 times less risky than Vipshop Holdings. It trades about -0.05 of its potential returns per unit of risk. Vipshop Holdings Limited is currently generating about -0.09 per unit of risk. If you would invest 9,941 in Wynn Resorts Limited on January 25, 2024 and sell it today you would lose (235.00) from holding Wynn Resorts Limited or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wynn Resorts Limited vs. Vipshop Holdings Limited
Performance |
| Timeline |
| Wynn Resorts Limited |
| Vipshop Holdings |
Wynn Resorts and Vipshop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wynn Resorts and Vipshop Holdings
The main advantage of trading using opposite Wynn Resorts and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Resorts position performs unexpectedly, Vipshop Holdings 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 Vipshop Holdings will offset losses from the drop in Vipshop Holdings' long position.| Wynn Resorts vs. MGM Resorts International | Wynn Resorts vs. Caesars Entertainment | Wynn Resorts vs. Melco Resorts Entertainment | Wynn Resorts vs. Penn National Gaming |
| Vipshop Holdings vs. Pinduoduo | Vipshop Holdings vs. Sea | Vipshop Holdings vs. MercadoLibre | Vipshop Holdings vs. Alibaba Group Holding |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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