Correlation Between Boyd Gaming and AECOM
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and AECOM 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 AECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and AECOM, you can compare the effects of market volatilities on Boyd Gaming and AECOM 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 AECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and AECOM.
Diversification Opportunities for Boyd Gaming and AECOM
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boyd and AECOM is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and AECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM 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 AECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and AECOM go up and down completely randomly.
Pair Corralation between Boyd Gaming and AECOM
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.38 times less return on investment than AECOM. But when comparing it to its historical volatility, Boyd Gaming is 1.66 times less risky than AECOM. It trades about 0.23 of its potential returns per unit of risk. AECOM is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 9,800 in AECOM on September 1, 2024 and sell it today you would earn a total of 1,200 from holding AECOM or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Boyd Gaming vs. AECOM
Performance |
| Timeline |
| Boyd Gaming |
| AECOM |
Boyd Gaming and AECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and AECOM
The main advantage of trading using opposite Boyd Gaming and AECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, AECOM 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 AECOM will offset losses from the drop in AECOM's long position.| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
| AECOM vs. Sixt Leasing SE | AECOM vs. FRACTAL GAMING GROUP | AECOM vs. VITEC SOFTWARE GROUP | AECOM vs. Boyd 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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