Correlation Between Boyd Gaming and Scientific Games
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Scientific Games 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 Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Scientific Games, you can compare the effects of market volatilities on Boyd Gaming and Scientific Games 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 Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Scientific Games.
Diversification Opportunities for Boyd Gaming and Scientific Games
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boyd and Scientific is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games 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 Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Scientific Games go up and down completely randomly.
Pair Corralation between Boyd Gaming and Scientific Games
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 2.4 times less return on investment than Scientific Games. But when comparing it to its historical volatility, Boyd Gaming is 1.15 times less risky than Scientific Games. It trades about 0.03 of its potential returns per unit of risk. Scientific Games is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,000 in Scientific Games on August 28, 2024 and sell it today you would earn a total of 2,900 from holding Scientific Games or generate 48.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. Scientific Games
Performance |
| Timeline |
| Boyd Gaming |
| Scientific Games |
Boyd Gaming and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Scientific Games
The main advantage of trading using opposite Boyd Gaming and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' long position.| Boyd Gaming vs. TreeHouse Foods | Boyd Gaming vs. JJ SNACK FOODS | Boyd Gaming vs. Cal Maine Foods | Boyd Gaming vs. Performance Food Group |
| Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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