Correlation Between Boyd Gaming and Air Canada
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Air Canada 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 Air Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Air Canada, you can compare the effects of market volatilities on Boyd Gaming and Air Canada 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 Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Air Canada.
Diversification Opportunities for Boyd Gaming and Air Canada
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boyd and Air is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada 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 Air Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Canada has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Air Canada go up and down completely randomly.
Pair Corralation between Boyd Gaming and Air Canada
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 2.34 times less return on investment than Air Canada. But when comparing it to its historical volatility, Boyd Gaming is 1.25 times less risky than Air Canada. It trades about 0.16 of its potential returns per unit of risk. Air Canada is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,089 in Air Canada on August 25, 2024 and sell it today you would earn a total of 539.00 from holding Air Canada or generate 49.49% 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. Air Canada
Performance |
| Timeline |
| Boyd Gaming |
| Air Canada |
Boyd Gaming and Air Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Air Canada
The main advantage of trading using opposite Boyd Gaming and Air Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Air Canada 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 Air Canada will offset losses from the drop in Air Canada's long position.| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
| Air Canada vs. CI GAMES SA | Air Canada vs. TSOGO SUN GAMING | Air Canada vs. Boyd Gaming | Air Canada vs. PENN NATL GAMING |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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