Correlation Between Bloomin Brands and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Bloomin Brands 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 Bloomin Brands and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomin Brands and Boyd Gaming, you can compare the effects of market volatilities on Bloomin Brands 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 Bloomin Brands with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomin Brands and Boyd Gaming.
Diversification Opportunities for Bloomin Brands and Boyd Gaming
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bloomin and Boyd is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bloomin Brands and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Bloomin Brands 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 Bloomin Brands 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 Bloomin Brands i.e., Bloomin Brands and Boyd Gaming go up and down completely randomly.
Pair Corralation between Bloomin Brands and Boyd Gaming
Given the investment horizon of 90 days Bloomin Brands is expected to under-perform the Boyd Gaming. In addition to that, Bloomin Brands is 3.69 times more volatile than Boyd Gaming. It trades about -0.12 of its total potential returns per unit of risk. Boyd Gaming is currently generating about 0.08 per unit of volatility. If you would invest 7,163 in Boyd Gaming on August 30, 2024 and sell it today you would earn a total of 147.00 from holding Boyd Gaming or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomin Brands vs. Boyd Gaming
Performance |
| Timeline |
| Bloomin Brands |
| Boyd Gaming |
Bloomin Brands and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomin Brands and Boyd Gaming
The main advantage of trading using opposite Bloomin Brands and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomin Brands 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.| Bloomin Brands vs. Chipotle Mexican Grill | Bloomin Brands vs. Yum Brands | Bloomin Brands vs. The Wendys Co | Bloomin Brands vs. McDonalds |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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