Correlation Between Boyd Gaming and Northern Trust
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Northern Trust 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 Northern Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Northern Trust, you can compare the effects of market volatilities on Boyd Gaming and Northern Trust 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 Northern Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Northern Trust.
Diversification Opportunities for Boyd Gaming and Northern Trust
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boyd and Northern is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Northern Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Trust 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 Northern Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Trust has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Northern Trust go up and down completely randomly.
Pair Corralation between Boyd Gaming and Northern Trust
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.87 times less return on investment than Northern Trust. In addition to that, Boyd Gaming is 1.05 times more volatile than Northern Trust. It trades about 0.16 of its total potential returns per unit of risk. Northern Trust is currently generating about 0.31 per unit of volatility. If you would invest 9,923 in Northern Trust on November 6, 2024 and sell it today you would earn a total of 877.00 from holding Northern Trust or generate 8.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Boyd Gaming vs. Northern Trust
Performance |
| Timeline |
| Boyd Gaming |
| Northern Trust |
Boyd Gaming and Northern Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Northern Trust
The main advantage of trading using opposite Boyd Gaming and Northern Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Northern Trust 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 Northern Trust will offset losses from the drop in Northern Trust's long position.| Boyd Gaming vs. USWE SPORTS AB | Boyd Gaming vs. LG Display Co | Boyd Gaming vs. PLAYTECH | Boyd Gaming vs. InPlay Oil Corp |
| Northern Trust vs. Meiko Electronics Co | Northern Trust vs. JIAHUA STORES | Northern Trust vs. GOME Retail Holdings | Northern Trust vs. COSTCO WHOLESALE CDR |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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