Correlation Between Amgen and Boyd Gaming

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

By analyzing existing cross correlation between Amgen Inc and Boyd Gaming, you can compare the effects of market volatilities on Amgen and Boyd Gaming 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 Amgen with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Boyd Gaming.

Diversification Opportunities for Amgen and Boyd Gaming

-0.76

Correlation Coefficient

Amgen  Boyd Gaming

Pay attention - limited upside

The 3 months correlation between Amgen and Boyd is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Amgen 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 Amgen Inc are associated (or correlated) with Boyd Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyd Gaming has no effect on the direction of Amgen i.e., Amgen and Boyd Gaming go up and down completely randomly.

Pair Corralation between Amgen and Boyd Gaming

Given the investment horizon of 90 days Amgen Inc is expected to generate 0.87 times more return on investment than Boyd Gaming. However, Amgen Inc is 1.15 times less risky than Boyd Gaming. It trades about 0.04 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.02 per unit of risk. If you would invest  22,176  in Amgen Inc on September 24, 2024 and sell it today you would earn a total of  4,162  from holding Amgen Inc or generate 18.77% return on investment over 90 days.

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

Amgen Inc  vs.  Boyd Gaming

Amgen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amgen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Boyd Gaming

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Boyd Gaming may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Amgen and Boyd Gaming

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

The idea behind Amgen Inc and Boyd Gaming 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.