Correlation Between Wynn Resorts and Golden Entertainment

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

Diversification Opportunities for Wynn Resorts and Golden Entertainment

0.83

Correlation Coefficient

Wynn Resorts  Golden Entertainment

Very poor diversification

The 3 months correlation between Wynn and Golden is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and Golden Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Entertainment 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 Golden Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Entertainment has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and Golden Entertainment go up and down completely randomly.

Pair Corralation between Wynn Resorts and Golden Entertainment

Assuming the 90 days horizon Wynn Resorts Limited is expected to generate 1.07 times more return on investment than Golden Entertainment. However, Wynn Resorts is 1.07 times more volatile than Golden Entertainment. It trades about 0.17 of its potential returns per unit of risk. Golden Entertainment is currently generating about 0.06 per unit of risk. If you would invest  7,144  in Wynn Resorts Limited on April 25, 2025 and sell it today you would earn a total of  1,955  from holding Wynn Resorts Limited or generate 27.37% return on investment over 90 days.

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

Wynn Resorts Limited  vs.  Golden Entertainment

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.

Golden Entertainment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Entertainment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Golden Entertainment may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Wynn Resorts and Golden Entertainment

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

The idea behind Wynn Resorts Limited and Golden Entertainment 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.