Correlation Between Boyd Gaming and GMS
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and GMS 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 GMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and GMS Inc, you can compare the effects of market volatilities on Boyd Gaming and GMS 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 GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and GMS.
Diversification Opportunities for Boyd Gaming and GMS
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boyd and GMS is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS 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 GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and GMS go up and down completely randomly.
Pair Corralation between Boyd Gaming and GMS
Considering the 90-day investment horizon Boyd Gaming is expected to generate 1.3 times less return on investment than GMS. But when comparing it to its historical volatility, Boyd Gaming is 1.66 times less risky than GMS. It trades about 0.36 of its potential returns per unit of risk. GMS Inc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 9,161 in GMS Inc on September 5, 2024 and sell it today you would earn a total of 1,107 from holding GMS Inc or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. GMS Inc
Performance |
| Timeline |
| Boyd Gaming |
| GMS Inc |
Boyd Gaming and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and GMS
The main advantage of trading using opposite Boyd Gaming and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, GMS 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 GMS will offset losses from the drop in GMS's 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 |
| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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