Correlation Between Boyd Group and Spanish Mountain

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

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

Diversification Opportunities for Boyd Group and Spanish Mountain

-0.42

Correlation Coefficient

Boyd Group  Spanish Mountain

Very good diversification

The 3 months correlation between Boyd and Spanish is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Group Services and Spanish Mountain Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spanish Mountain Gold and Boyd Group 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 Boyd Group Services are associated (or correlated) with Spanish Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spanish Mountain Gold has no effect on the direction of Boyd Group i.e., Boyd Group and Spanish Mountain go up and down completely randomly.

Pair Corralation between Boyd Group and Spanish Mountain

Assuming the 90 days trading horizon Boyd Group Services is expected to generate 0.33 times more return on investment than Spanish Mountain. However, Boyd Group Services is 3.01 times less risky than Spanish Mountain. It trades about 0.01 of its potential returns per unit of risk. Spanish Mountain Gold is currently generating about 0.0 per unit of risk. If you would invest  20,521  in Boyd Group Services on September 13, 2024 and sell it today you would lose (12.00) from holding Boyd Group Services or give up 0.06% of portfolio value over 90 days.

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

Boyd Group Services  vs.  Spanish Mountain Gold

Boyd Group Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boyd Group Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Boyd Group is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Spanish Mountain Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spanish Mountain Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Boyd Group and Spanish Mountain

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

The idea behind Boyd Group Services and Spanish Mountain Gold 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.