Correlation Between Boyd Gaming and Essentra Plc
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Essentra Plc 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 Essentra Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Essentra plc, you can compare the effects of market volatilities on Boyd Gaming and Essentra Plc 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 Essentra Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Essentra Plc.
Diversification Opportunities for Boyd Gaming and Essentra Plc
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Boyd and Essentra is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Essentra plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essentra plc 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 Essentra Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essentra plc has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Essentra Plc go up and down completely randomly.
Pair Corralation between Boyd Gaming and Essentra Plc
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 0.64 times more return on investment than Essentra Plc. However, Boyd Gaming is 1.57 times less risky than Essentra Plc. It trades about 0.13 of its potential returns per unit of risk. Essentra plc is currently generating about -0.19 per unit of risk. If you would invest 6,900 in Boyd Gaming on September 13, 2024 and sell it today you would earn a total of 200.00 from holding Boyd Gaming or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. Essentra plc
Performance |
| Timeline |
| Boyd Gaming |
| Essentra plc |
Boyd Gaming and Essentra Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Essentra Plc
The main advantage of trading using opposite Boyd Gaming and Essentra Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Essentra Plc 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 Essentra Plc will offset losses from the drop in Essentra Plc's long position.| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
| Essentra Plc vs. Transport International Holdings | Essentra Plc vs. Solstad Offshore ASA | Essentra Plc vs. SIEM OFFSHORE NEW | Essentra Plc vs. Fukuyama Transporting Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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