Correlation Between Boyd Gaming and CONOCOPHILLIPS

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

By analyzing existing cross correlation between Boyd Gaming and CONOCOPHILLIPS 335 percent, you can compare the effects of market volatilities on Boyd Gaming and CONOCOPHILLIPS 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 CONOCOPHILLIPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and CONOCOPHILLIPS.

Diversification Opportunities for Boyd Gaming and CONOCOPHILLIPS

0.24

Correlation Coefficient

Boyd Gaming  CONOCOPHILLIPS

Modest diversification

The 3 months correlation between Boyd and CONOCOPHILLIPS is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and CONOCOPHILLIPS 335 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONOCOPHILLIPS 335 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 CONOCOPHILLIPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONOCOPHILLIPS 335 has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and CONOCOPHILLIPS go up and down completely randomly.

Pair Corralation between Boyd Gaming and CONOCOPHILLIPS

Considering the 90-day investment horizon Boyd Gaming is expected to generate 4.36 times more return on investment than CONOCOPHILLIPS. However, Boyd Gaming is 4.36 times more volatile than CONOCOPHILLIPS 335 percent. It trades about 0.05 of its potential returns per unit of risk. CONOCOPHILLIPS 335 percent is currently generating about 0.01 per unit of risk. If you would invest  5,384  in Boyd Gaming on September 14, 2024 and sell it today you would earn a total of  2,180  from holding Boyd Gaming or generate 40.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.11%
Values	Daily Returns

Boyd Gaming  vs.  CONOCOPHILLIPS 335 percent

Boyd Gaming

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Boyd Gaming exhibited solid returns over the last few months and may actually be approaching a breakup point.

CONOCOPHILLIPS 335

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONOCOPHILLIPS 335 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CONOCOPHILLIPS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boyd Gaming and CONOCOPHILLIPS

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

The idea behind Boyd Gaming and CONOCOPHILLIPS 335 percent 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.