Correlation Between Boyd Gaming and Bt Brands
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Bt Brands 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 Bt Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Bt Brands, you can compare the effects of market volatilities on Boyd Gaming and Bt Brands 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 Bt Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Bt Brands.
Diversification Opportunities for Boyd Gaming and Bt Brands
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boyd and BTBD is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Bt Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bt Brands 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 Bt Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bt Brands has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Bt Brands go up and down completely randomly.
Pair Corralation between Boyd Gaming and Bt Brands
Considering the 90-day investment horizon Boyd Gaming is expected to generate 1.27 times less return on investment than Bt Brands. But when comparing it to its historical volatility, Boyd Gaming is 3.48 times less risky than Bt Brands. It trades about 0.06 of its potential returns per unit of risk. Bt Brands is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 196.00 in Bt Brands on November 28, 2024 and sell it today you would lose (26.00) from holding Bt Brands or give up 13.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. Bt Brands
Performance |
| Timeline |
| Boyd Gaming |
| Bt Brands |
Boyd Gaming and Bt Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Bt Brands
The main advantage of trading using opposite Boyd Gaming and Bt Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Bt Brands 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 Bt Brands will offset losses from the drop in Bt Brands' long position.| Boyd Gaming vs. MGM Resorts International | Boyd Gaming vs. Las Vegas Sands | Boyd Gaming vs. Wynn Resorts Limited | Boyd Gaming vs. Penn National Gaming |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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