Correlation Between Boyd Gaming and China Mobile
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and China Mobile 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 China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and China Life Insurance, you can compare the effects of market volatilities on Boyd Gaming and China Mobile 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 China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and China Mobile.
Diversification Opportunities for Boyd Gaming and China Mobile
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boyd and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance 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 China Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and China Mobile go up and down completely randomly.
Pair Corralation between Boyd Gaming and China Mobile
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 3.5 times less return on investment than China Mobile. But when comparing it to its historical volatility, Boyd Gaming is 2.31 times less risky than China Mobile. It trades about 0.05 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 65.00 in China Life Insurance on September 3, 2024 and sell it today you would earn a total of 114.00 from holding China Life Insurance or generate 175.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. China Life Insurance
Performance |
| Timeline |
| Boyd Gaming |
| China Life Insurance |
Boyd Gaming and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and China Mobile
The main advantage of trading using opposite Boyd Gaming and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, China Mobile 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 China Mobile will offset losses from the drop in China Mobile's long position.| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
| China Mobile vs. Applied Materials | China Mobile vs. Goodyear Tire Rubber | China Mobile vs. THRACE PLASTICS | China Mobile vs. Vulcan Materials |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |