Correlation Between Aristocrat Leisure and Boyaa Interactive
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and Boyaa Interactive 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 Aristocrat Leisure and Boyaa Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure Limited and Boyaa Interactive International, you can compare the effects of market volatilities on Aristocrat Leisure and Boyaa Interactive 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 Aristocrat Leisure with a short position of Boyaa Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Boyaa Interactive.
Diversification Opportunities for Aristocrat Leisure and Boyaa Interactive
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aristocrat and Boyaa is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure Limited and Boyaa Interactive Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyaa Interactive and Aristocrat Leisure 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 Aristocrat Leisure Limited are associated (or correlated) with Boyaa Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyaa Interactive has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and Boyaa Interactive go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Boyaa Interactive
Assuming the 90 days horizon Aristocrat Leisure is expected to generate 8.24 times less return on investment than Boyaa Interactive. But when comparing it to its historical volatility, Aristocrat Leisure Limited is 6.8 times less risky than Boyaa Interactive. It trades about 0.39 of its potential returns per unit of risk. Boyaa Interactive International is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Boyaa Interactive International on August 30, 2024 and sell it today you would earn a total of 33.00 from holding Boyaa Interactive International or generate 143.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aristocrat Leisure Limited vs. Boyaa Interactive Internationa
Performance |
| Timeline |
| Aristocrat Leisure |
| Boyaa Interactive |
Aristocrat Leisure and Boyaa Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Boyaa Interactive
The main advantage of trading using opposite Aristocrat Leisure and Boyaa Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, Boyaa Interactive 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 Boyaa Interactive will offset losses from the drop in Boyaa Interactive's long position.| Aristocrat Leisure vs. Superior Plus Corp | Aristocrat Leisure vs. NMI Holdings | Aristocrat Leisure vs. SIVERS SEMICONDUCTORS AB | Aristocrat Leisure vs. Talanx AG |
| Boyaa Interactive vs. National Health Investors | Boyaa Interactive vs. Diamondrock Hospitality Co | Boyaa Interactive vs. Evolution Mining Limited | Boyaa Interactive vs. Jacquet Metal Service |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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