Correlation Between Boyd Gaming and WEBTOON Entertainment

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

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

Diversification Opportunities for Boyd Gaming and WEBTOON Entertainment

0.55

Correlation Coefficient

Boyd Gaming  WEBTOON Entertainment

Very weak diversification

The 3 months correlation between Boyd and WEBTOON is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and WEBTOON Entertainment Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBTOON Entertainment 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 WEBTOON Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBTOON Entertainment has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and WEBTOON Entertainment go up and down completely randomly.

Pair Corralation between Boyd Gaming and WEBTOON Entertainment

Considering the 90-day investment horizon Boyd Gaming is expected to generate 1.15 times less return on investment than WEBTOON Entertainment. But when comparing it to its historical volatility, Boyd Gaming is 2.21 times less risky than WEBTOON Entertainment. It trades about 0.11 of its potential returns per unit of risk. WEBTOON Entertainment Common is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,220  in WEBTOON Entertainment Common on September 26, 2024 and sell it today you would earn a total of  110.00  from holding WEBTOON Entertainment Common or generate 9.02% return on investment over 90 days.

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

Boyd Gaming  vs.  WEBTOON Entertainment Common

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.

WEBTOON Entertainment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WEBTOON Entertainment Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, WEBTOON Entertainment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Boyd Gaming and WEBTOON Entertainment

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

The idea behind Boyd Gaming and WEBTOON Entertainment 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.