Correlation Between Boyd Gaming and 373334KR1

Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and 373334KR1 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 373334KR1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boyd Gaming and SO 5125 15 MAY 52, you can compare the effects of market volatilities on Boyd Gaming and 373334KR1 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 373334KR1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and 373334KR1.

Diversification Opportunities for Boyd Gaming and 373334KR1

-0.43

Correlation Coefficient

Boyd Gaming  373334KR1

Very good diversification

The 3 months correlation between Boyd and 373334KR1 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and SO 5125 15 MAY 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SO 5125 15 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 373334KR1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SO 5125 15 has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and 373334KR1 go up and down completely randomly.

Pair Corralation between Boyd Gaming and 373334KR1

Considering the 90-day investment horizon Boyd Gaming is expected to generate 1.87 times more return on investment than 373334KR1. However, Boyd Gaming is 1.87 times more volatile than SO 5125 15 MAY 52. It trades about 0.21 of its potential returns per unit of risk. SO 5125 15 MAY 52 is currently generating about -0.11 per unit of risk. If you would invest  6,145  in Boyd Gaming on September 15, 2024 and sell it today you would earn a total of  1,350  from holding Boyd Gaming or generate 21.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Boyd Gaming  vs.  SO 5125 15 MAY 52

Boyd Gaming

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 16 (%) 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.

SO 5125 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SO 5125 15 MAY 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 373334KR1 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 373334KR1

The main advantage of trading using opposite Boyd Gaming and 373334KR1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, 373334KR1 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 373334KR1 will offset losses from the drop in 373334KR1's long position.

The idea behind Boyd Gaming and SO 5125 15 MAY 52 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.