Correlation Between Boyd Gaming and Fly E

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

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

Diversification Opportunities for Boyd Gaming and Fly E

-0.49

Correlation Coefficient

Boyd Gaming  Fly E

Very good diversification

The 3 months correlation between Boyd and Fly is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Fly E Group, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fly E Group, and Boyd Gaming 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 Gaming are associated (or correlated) with Fly E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fly E Group, has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Fly E go up and down completely randomly.

Pair Corralation between Boyd Gaming and Fly E

Considering the 90-day investment horizon Boyd Gaming is expected to generate 0.24 times more return on investment than Fly E. However, Boyd Gaming is 4.19 times less risky than Fly E. It trades about 0.1 of its potential returns per unit of risk. Fly E Group, Common is currently generating about -0.04 per unit of risk. If you would invest  6,520  in Boyd Gaming on September 27, 2024 and sell it today you would earn a total of  648.00  from holding Boyd Gaming or generate 9.94% return on investment over 90 days.

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

Boyd Gaming  vs.  Fly E Group, Common

Boyd Gaming

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 7 (%) 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.

Fly E Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fly E Group, Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Boyd Gaming and Fly E

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

The idea behind Boyd Gaming and Fly E Group, Common 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.