Correlation Between Boyd Gaming and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Dow Jones Industrial, you can compare the effects of market volatilities on Boyd Gaming and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Dow Jones.
Diversification Opportunities for Boyd Gaming and Dow Jones
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boyd and Dow is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Dow Jones go up and down completely randomly.
Pair Corralation between Boyd Gaming and Dow Jones
Assuming the 90 days horizon Boyd Gaming is expected to generate 2.41 times more return on investment than Dow Jones. However, Boyd Gaming is 2.41 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 5,394 in Boyd Gaming on September 2, 2024 and sell it today you would earn a total of 1,506 from holding Boyd Gaming or generate 27.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.02% |
| Values | Daily Returns |
Boyd Gaming vs. Dow Jones Industrial
Performance |
| Timeline |
Boyd Gaming and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Boyd Gaming
Pair trading matchups for Boyd Gaming
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Boyd Gaming and Dow Jones
The main advantage of trading using opposite Boyd Gaming and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Boyd Gaming vs. National Retail Properties | Boyd Gaming vs. INFORMATION SVC GRP | Boyd Gaming vs. Pick n Pay | Boyd Gaming vs. DATANG INTL POW |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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