Correlation Between Boyd Gaming and RJK Explorations
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and RJK Explorations 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 RJK Explorations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and RJK Explorations, you can compare the effects of market volatilities on Boyd Gaming and RJK Explorations 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 RJK Explorations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and RJK Explorations.
Diversification Opportunities for Boyd Gaming and RJK Explorations
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boyd and RJK is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and RJK Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RJK Explorations 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 RJK Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RJK Explorations has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and RJK Explorations go up and down completely randomly.
Pair Corralation between Boyd Gaming and RJK Explorations
Considering the 90-day investment horizon Boyd Gaming is expected to generate 33.66 times less return on investment than RJK Explorations. But when comparing it to its historical volatility, Boyd Gaming is 22.19 times less risky than RJK Explorations. It trades about 0.08 of its potential returns per unit of risk. RJK Explorations is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5.00 in RJK Explorations on August 30, 2024 and sell it today you would earn a total of 0.00 from holding RJK Explorations or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. RJK Explorations
Performance |
| Timeline |
| Boyd Gaming |
| RJK Explorations |
Boyd Gaming and RJK Explorations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and RJK Explorations
The main advantage of trading using opposite Boyd Gaming and RJK Explorations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, RJK Explorations 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 RJK Explorations will offset losses from the drop in RJK Explorations' 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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