Correlation Between Boyd Gaming and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and NH HOTEL 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 NH HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and NH HOTEL GROUP, you can compare the effects of market volatilities on Boyd Gaming and NH HOTEL 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and NH HOTEL.
Diversification Opportunities for Boyd Gaming and NH HOTEL
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boyd and NH5 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL 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 NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and NH HOTEL go up and down completely randomly.
Pair Corralation between Boyd Gaming and NH HOTEL
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 2.9 times more return on investment than NH HOTEL. However, Boyd Gaming is 2.9 times more volatile than NH HOTEL GROUP. It trades about 0.39 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.02 per unit of risk. If you would invest 6,700 in Boyd Gaming on October 22, 2024 and sell it today you would earn a total of 550.00 from holding Boyd Gaming or generate 8.21% 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. NH HOTEL GROUP
Performance |
| Timeline |
| Boyd Gaming |
| NH HOTEL GROUP |
Boyd Gaming and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and NH HOTEL
The main advantage of trading using opposite Boyd Gaming and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| Boyd Gaming vs. GWILLI FOOD | Boyd Gaming vs. TreeHouse Foods | Boyd Gaming vs. United Natural Foods | Boyd Gaming vs. INTERSHOP Communications Aktiengesellschaft |
| NH HOTEL vs. Hanison Construction Holdings | NH HOTEL vs. Federal Agricultural Mortgage | NH HOTEL vs. Universal Insurance Holdings | NH HOTEL vs. WIMFARM SA EO |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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