Correlation Between Above Food and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Above Food and Boyd Gaming 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 Above Food and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Above Food Ingredients and Boyd Gaming, you can compare the effects of market volatilities on Above Food and Boyd Gaming 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 Above Food with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Above Food and Boyd Gaming.
Diversification Opportunities for Above Food and Boyd Gaming
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Above and Boyd is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Above Food Ingredients and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Above Food 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 Above Food Ingredients are associated (or correlated) with Boyd Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyd Gaming has no effect on the direction of Above Food i.e., Above Food and Boyd Gaming go up and down completely randomly.
Pair Corralation between Above Food and Boyd Gaming
Assuming the 90 days horizon Above Food Ingredients is expected to generate 16.67 times more return on investment than Boyd Gaming. However, Above Food is 16.67 times more volatile than Boyd Gaming. It trades about 0.15 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.23 per unit of risk. If you would invest 1.68 in Above Food Ingredients on September 12, 2024 and sell it today you would earn a total of 0.71 from holding Above Food Ingredients or generate 42.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Above Food Ingredients vs. Boyd Gaming
Performance |
| Timeline |
| Above Food Ingredients |
| Boyd Gaming |
Above Food and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Above Food and Boyd Gaming
The main advantage of trading using opposite Above Food and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Above Food position performs unexpectedly, Boyd Gaming 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 Boyd Gaming will offset losses from the drop in Boyd Gaming's long position.| Above Food vs. Boyd Gaming | Above Food vs. BJs Restaurants | Above Food vs. Papaya Growth Opportunity | Above Food vs. Sandstorm Gold Ltd |
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Check out your portfolio center.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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