Correlation Between Boyd Gaming and Guangdong Investment
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Guangdong Investment 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 Guangdong Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Guangdong Investment Limited, you can compare the effects of market volatilities on Boyd Gaming and Guangdong Investment 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 Guangdong Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Guangdong Investment.
Diversification Opportunities for Boyd Gaming and Guangdong Investment
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boyd and Guangdong is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Guangdong Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Investment 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 Guangdong Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Investment has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Guangdong Investment go up and down completely randomly.
Pair Corralation between Boyd Gaming and Guangdong Investment
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 7.5 times less return on investment than Guangdong Investment. But when comparing it to its historical volatility, Boyd Gaming is 3.93 times less risky than Guangdong Investment. It trades about 0.04 of its potential returns per unit of risk. Guangdong Investment Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Guangdong Investment Limited on October 14, 2024 and sell it today you would earn a total of 61.00 from holding Guangdong Investment Limited or generate 381.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. Guangdong Investment Limited
Performance |
| Timeline |
| Boyd Gaming |
| Guangdong Investment |
Boyd Gaming and Guangdong Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Guangdong Investment
The main advantage of trading using opposite Boyd Gaming and Guangdong Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Guangdong Investment 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 Guangdong Investment will offset losses from the drop in Guangdong Investment's long position.| Boyd Gaming vs. Martin Marietta Materials | Boyd Gaming vs. SANOK RUBBER ZY | Boyd Gaming vs. The Yokohama Rubber | Boyd Gaming vs. Dave Busters Entertainment |
| Guangdong Investment vs. Boyd Gaming | Guangdong Investment vs. CONTAGIOUS GAMING INC | Guangdong Investment vs. Nomad Foods | Guangdong Investment vs. International Game Technology |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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