Correlation Between Boyd Gaming and Ecolab
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Ecolab 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 Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Ecolab Inc, you can compare the effects of market volatilities on Boyd Gaming and Ecolab 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 Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Ecolab.
Diversification Opportunities for Boyd Gaming and Ecolab
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boyd and Ecolab is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc 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 Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Ecolab go up and down completely randomly.
Pair Corralation between Boyd Gaming and Ecolab
Considering the 90-day investment horizon Boyd Gaming is expected to generate 1.01 times less return on investment than Ecolab. In addition to that, Boyd Gaming is 1.56 times more volatile than Ecolab Inc. It trades about 0.06 of its total potential returns per unit of risk. Ecolab Inc is currently generating about 0.09 per unit of volatility. If you would invest 19,535 in Ecolab Inc on September 12, 2024 and sell it today you would earn a total of 5,170 from holding Ecolab Inc or generate 26.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. Ecolab Inc
Performance |
| Timeline |
| Boyd Gaming |
| Ecolab Inc |
Boyd Gaming and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Ecolab
The main advantage of trading using opposite Boyd Gaming and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| Boyd Gaming vs. MGM Resorts International | Boyd Gaming vs. Las Vegas Sands | Boyd Gaming vs. Wynn Resorts Limited | Boyd Gaming vs. Melco Resorts Entertainment |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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