Correlation Between Boyd Gaming and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Summit Hotel 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 Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Summit Hotel Properties, you can compare the effects of market volatilities on Boyd Gaming and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Summit Hotel.
Diversification Opportunities for Boyd Gaming and Summit Hotel
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boyd and Summit is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Summit Hotel go up and down completely randomly.
Pair Corralation between Boyd Gaming and Summit Hotel
Considering the 90-day investment horizon Boyd Gaming is expected to generate 0.85 times more return on investment than Summit Hotel. However, Boyd Gaming is 1.18 times less risky than Summit Hotel. It trades about 0.04 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.01 per unit of risk. If you would invest 5,651 in Boyd Gaming on September 5, 2024 and sell it today you would earn a total of 1,750 from holding Boyd Gaming or generate 30.97% 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. Summit Hotel Properties
Performance |
| Timeline |
| Boyd Gaming |
| Summit Hotel Properties |
Boyd Gaming and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Summit Hotel
The main advantage of trading using opposite Boyd Gaming and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel'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 |
| Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Service Properties Trust |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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