Correlation Between Boyd Gaming and Pan American
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Pan American 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 Pan American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Pan American Silver, you can compare the effects of market volatilities on Boyd Gaming and Pan American 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 Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Pan American.
Diversification Opportunities for Boyd Gaming and Pan American
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boyd and Pan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver 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 Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Pan American go up and down completely randomly.
Pair Corralation between Boyd Gaming and Pan American
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.69 times less return on investment than Pan American. But when comparing it to its historical volatility, Boyd Gaming is 1.5 times less risky than Pan American. It trades about 0.06 of its potential returns per unit of risk. Pan American Silver is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,444 in Pan American Silver on October 26, 2024 and sell it today you would earn a total of 648.00 from holding Pan American Silver or generate 44.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Boyd Gaming vs. Pan American Silver
Performance |
| Timeline |
| Boyd Gaming |
| Pan American Silver |
Boyd Gaming and Pan American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Pan American
The main advantage of trading using opposite Boyd Gaming and Pan American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Pan American 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 Pan American will offset losses from the drop in Pan American's long position.| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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