Correlation Between Boyd Gaming and Wynn Resorts

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

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

Diversification Opportunities for Boyd Gaming and Wynn Resorts

-0.33

Correlation Coefficient

Boyd Gaming  Wynn Resorts

Very good diversification

The 3 months correlation between Boyd and Wynn is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Wynn Resorts Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Resorts Limited 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 Wynn Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wynn Resorts Limited has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Wynn Resorts go up and down completely randomly.

Pair Corralation between Boyd Gaming and Wynn Resorts

Considering the 90-day investment horizon Boyd Gaming is expected to generate 0.71 times more return on investment than Wynn Resorts. However, Boyd Gaming is 1.4 times less risky than Wynn Resorts. It trades about 0.14 of its potential returns per unit of risk. Wynn Resorts Limited is currently generating about 0.02 per unit of risk. If you would invest  5,367  in Boyd Gaming on September 23, 2024 and sell it today you would earn a total of  1,753  from holding Boyd Gaming or generate 32.66% return on investment over 90 days.

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

Boyd Gaming  vs.  Wynn Resorts Limited

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.

Wynn Resorts Limited

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wynn Resorts Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Wynn Resorts displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boyd Gaming and Wynn Resorts

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

The idea behind Boyd Gaming and Wynn Resorts Limited 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.