Correlation Between Boyd Gaming and National Beverage
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and National Beverage 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 National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and National Beverage Corp, you can compare the effects of market volatilities on Boyd Gaming and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and National Beverage.
Diversification Opportunities for Boyd Gaming and National Beverage
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boyd and National is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and National Beverage go up and down completely randomly.
Pair Corralation between Boyd Gaming and National Beverage
Assuming the 90 days horizon Boyd Gaming is expected to generate 1.07 times more return on investment than National Beverage. However, Boyd Gaming is 1.07 times more volatile than National Beverage Corp. It trades about 0.24 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.15 per unit of risk. If you would invest 5,383 in Boyd Gaming on September 3, 2024 and sell it today you would earn a total of 1,517 from holding Boyd Gaming or generate 28.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. National Beverage Corp
Performance |
| Timeline |
| Boyd Gaming |
| National Beverage Corp |
Boyd Gaming and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and National Beverage
The main advantage of trading using opposite Boyd Gaming and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| Boyd Gaming vs. National Beverage Corp | Boyd Gaming vs. COFCO Joycome Foods | Boyd Gaming vs. Cal Maine Foods | Boyd Gaming vs. MOLSON RS BEVERAGE |
| National Beverage vs. HK Electric Investments | National Beverage vs. United Utilities Group | National Beverage vs. United Internet AG | National Beverage vs. WisdomTree Investments |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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