Correlation Between Boyd Gaming and SBA Communications
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and SBA Communications 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 SBA Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and SBA Communications Corp, you can compare the effects of market volatilities on Boyd Gaming and SBA Communications 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 SBA Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and SBA Communications.
Diversification Opportunities for Boyd Gaming and SBA Communications
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boyd and SBA is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications 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 SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and SBA Communications go up and down completely randomly.
Pair Corralation between Boyd Gaming and SBA Communications
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 0.95 times more return on investment than SBA Communications. However, Boyd Gaming is 1.05 times less risky than SBA Communications. It trades about 0.25 of its potential returns per unit of risk. SBA Communications Corp is currently generating about 0.1 per unit of risk. If you would invest 6,300 in Boyd Gaming on September 2, 2024 and sell it today you would earn a total of 600.00 from holding Boyd Gaming or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. SBA Communications Corp
Performance |
| Timeline |
| Boyd Gaming |
| SBA Communications Corp |
Boyd Gaming and SBA Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and SBA Communications
The main advantage of trading using opposite Boyd Gaming and SBA Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, SBA Communications 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 SBA Communications will offset losses from the drop in SBA Communications' long position.| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
| SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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