Correlation Between Boyd Gaming and Games Workshop
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Games Workshop 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 Games Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Games Workshop Group, you can compare the effects of market volatilities on Boyd Gaming and Games Workshop 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 Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Games Workshop.
Diversification Opportunities for Boyd Gaming and Games Workshop
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boyd and Games is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop Group 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 Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Games Workshop go up and down completely randomly.
Pair Corralation between Boyd Gaming and Games Workshop
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.16 times less return on investment than Games Workshop. But when comparing it to its historical volatility, Boyd Gaming is 1.26 times less risky than Games Workshop. It trades about 0.14 of its potential returns per unit of risk. Games Workshop Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 11,503 in Games Workshop Group on September 3, 2024 and sell it today you would earn a total of 5,397 from holding Games Workshop Group or generate 46.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. Games Workshop Group
Performance |
| Timeline |
| Boyd Gaming |
| Games Workshop Group |
Boyd Gaming and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Games Workshop
The main advantage of trading using opposite Boyd Gaming and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Games Workshop 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 Games Workshop will offset losses from the drop in Games Workshop's long position.| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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