Correlation Between Boyd Gaming and Home Depot
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Home Depot 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 Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and The Home Depot, you can compare the effects of market volatilities on Boyd Gaming and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Home Depot.
Diversification Opportunities for Boyd Gaming and Home Depot
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boyd and Home is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and The Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Home Depot go up and down completely randomly.
Pair Corralation between Boyd Gaming and Home Depot
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.23 times more return on investment than Home Depot. However, Boyd Gaming is 1.23 times more volatile than The Home Depot. It trades about 0.18 of its potential returns per unit of risk. The Home Depot is currently generating about 0.17 per unit of risk. If you would invest 6,950 in Boyd Gaming on November 3, 2024 and sell it today you would earn a total of 400.00 from holding Boyd Gaming or generate 5.76% 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. The Home Depot
Performance |
| Timeline |
| Boyd Gaming |
| Home Depot |
Boyd Gaming and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Home Depot
The main advantage of trading using opposite Boyd Gaming and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| Boyd Gaming vs. PENN NATL GAMING | Boyd Gaming vs. GigaMedia | Boyd Gaming vs. QINGCI GAMES INC | Boyd Gaming vs. Scientific Games |
| Home Depot vs. DATATEC LTD 2 | Home Depot vs. Linedata Services SA | Home Depot vs. INFORMATION SVC GRP | Home Depot vs. TERADATA |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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