Correlation Between Boyd Gaming and Levi Strauss
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Levi Strauss 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 Levi Strauss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Levi Strauss Co, you can compare the effects of market volatilities on Boyd Gaming and Levi Strauss 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 Levi Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Levi Strauss.
Diversification Opportunities for Boyd Gaming and Levi Strauss
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boyd and Levi is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Levi Strauss Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levi Strauss 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 Levi Strauss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levi Strauss has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Levi Strauss go up and down completely randomly.
Pair Corralation between Boyd Gaming and Levi Strauss
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.1 times less return on investment than Levi Strauss. But when comparing it to its historical volatility, Boyd Gaming is 1.32 times less risky than Levi Strauss. It trades about 0.06 of its potential returns per unit of risk. Levi Strauss Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,349 in Levi Strauss Co on September 5, 2024 and sell it today you would earn a total of 374.00 from holding Levi Strauss Co or generate 27.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Boyd Gaming vs. Levi Strauss Co
Performance |
| Timeline |
| Boyd Gaming |
| Levi Strauss |
Boyd Gaming and Levi Strauss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Levi Strauss
The main advantage of trading using opposite Boyd Gaming and Levi Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Levi Strauss 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 Levi Strauss will offset losses from the drop in Levi Strauss' long position.| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
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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