Correlation Between CAL MAINE and Wynn Resorts

Can any of the company-specific risk be diversified away by investing in both CAL MAINE 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 CAL MAINE and Wynn Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CAL MAINE FOODS and Wynn Resorts Limited, you can compare the effects of market volatilities on CAL MAINE 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 CAL MAINE with a short position of Wynn Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and Wynn Resorts.

Diversification Opportunities for CAL MAINE and Wynn Resorts

0.68

Correlation Coefficient

CAL MAINE  Wynn Resorts

Poor diversification

The 3 months correlation between CAL and Wynn is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS 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 CAL MAINE 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 CAL MAINE FOODS 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 CAL MAINE i.e., CAL MAINE and Wynn Resorts go up and down completely randomly.

Pair Corralation between CAL MAINE and Wynn Resorts

Assuming the 90 days trading horizon CAL MAINE is expected to generate 1.66 times less return on investment than Wynn Resorts. But when comparing it to its historical volatility, CAL MAINE FOODS is 1.36 times less risky than Wynn Resorts. It trades about 0.14 of its potential returns per unit of risk. Wynn Resorts Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  7,145  in Wynn Resorts Limited on April 24, 2025 and sell it today you would earn a total of  1,883  from holding Wynn Resorts Limited or generate 26.35% return on investment over 90 days.

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

CAL MAINE FOODS  vs.  Wynn Resorts Limited

CAL MAINE FOODS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CAL MAINE FOODS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, CAL MAINE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Wynn Resorts Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wynn Resorts Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Wynn Resorts reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CAL MAINE and Wynn Resorts

The main advantage of trading using opposite CAL MAINE and Wynn Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE 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.

The idea behind CAL MAINE FOODS and Wynn Resorts 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.