Correlation Between Boyd Gaming and Continental Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Continental Aktiengesellscha 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 Continental Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Continental Aktiengesellschaft, you can compare the effects of market volatilities on Boyd Gaming and Continental Aktiengesellscha 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 Continental Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Continental Aktiengesellscha.
Diversification Opportunities for Boyd Gaming and Continental Aktiengesellscha
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boyd and Continental is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Continental Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Aktiengesellscha 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 Continental Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Aktiengesellscha has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Continental Aktiengesellscha go up and down completely randomly.
Pair Corralation between Boyd Gaming and Continental Aktiengesellscha
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 0.91 times more return on investment than Continental Aktiengesellscha. However, Boyd Gaming is 1.1 times less risky than Continental Aktiengesellscha. It trades about 0.04 of its potential returns per unit of risk. Continental Aktiengesellschaft is currently generating about 0.02 per unit of risk. If you would invest 5,349 in Boyd Gaming on October 11, 2024 and sell it today you would earn a total of 1,651 from holding Boyd Gaming or generate 30.87% 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. Continental Aktiengesellschaft
Performance |
| Timeline |
| Boyd Gaming |
| Continental Aktiengesellscha |
Boyd Gaming and Continental Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Continental Aktiengesellscha
The main advantage of trading using opposite Boyd Gaming and Continental Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Continental Aktiengesellscha 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 Continental Aktiengesellscha will offset losses from the drop in Continental Aktiengesellscha's long position.| Boyd Gaming vs. Synovus Financial Corp | Boyd Gaming vs. Direct Line Insurance | Boyd Gaming vs. Discover Financial Services | Boyd Gaming vs. SINGAPORE AIRLINES |
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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