Correlation Between Boyd Gaming and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Safety Insurance 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 Safety Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Safety Insurance Group, you can compare the effects of market volatilities on Boyd Gaming and Safety Insurance 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 Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Safety Insurance.
Diversification Opportunities for Boyd Gaming and Safety Insurance
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boyd and Safety is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Safety Insurance go up and down completely randomly.
Pair Corralation between Boyd Gaming and Safety Insurance
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.29 times more return on investment than Safety Insurance. However, Boyd Gaming is 1.29 times more volatile than Safety Insurance Group. It trades about -0.09 of its potential returns per unit of risk. Safety Insurance Group is currently generating about -0.18 per unit of risk. If you would invest 7,083 in Boyd Gaming on October 14, 2024 and sell it today you would lose (183.00) from holding Boyd Gaming or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. Safety Insurance Group
Performance |
| Timeline |
| Boyd Gaming |
| Safety Insurance |
Boyd Gaming and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Safety Insurance
The main advantage of trading using opposite Boyd Gaming and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Safety Insurance 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| Boyd Gaming vs. Martin Marietta Materials | Boyd Gaming vs. SANOK RUBBER ZY | Boyd Gaming vs. The Yokohama Rubber | Boyd Gaming vs. Dave Busters Entertainment |
| Safety Insurance vs. MOVIE GAMES SA | Safety Insurance vs. Boyd Gaming | Safety Insurance vs. CONTAGIOUS GAMING INC | Safety Insurance vs. Media and Games |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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