Correlation Between Boyd Gaming and Royalty Management
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Royalty Management 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 Royalty Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Royalty Management Holding, you can compare the effects of market volatilities on Boyd Gaming and Royalty Management 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 Royalty Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Royalty Management.
Diversification Opportunities for Boyd Gaming and Royalty Management
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boyd and Royalty is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Royalty Management Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royalty Management 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 Royalty Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royalty Management has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Royalty Management go up and down completely randomly.
Pair Corralation between Boyd Gaming and Royalty Management
Considering the 90-day investment horizon Boyd Gaming is expected to generate 0.3 times more return on investment than Royalty Management. However, Boyd Gaming is 3.31 times less risky than Royalty Management. It trades about 0.33 of its potential returns per unit of risk. Royalty Management Holding is currently generating about -0.12 per unit of risk. If you would invest 6,831 in Boyd Gaming on September 4, 2024 and sell it today you would earn a total of 570.00 from holding Boyd Gaming or generate 8.34% 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. Royalty Management Holding
Performance |
| Timeline |
| Boyd Gaming |
| Royalty Management |
Boyd Gaming and Royalty Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and Royalty Management
The main advantage of trading using opposite Boyd Gaming and Royalty Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Royalty Management 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 Royalty Management will offset losses from the drop in Royalty Management'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 |
| Royalty Management vs. Biglari Holdings | Royalty Management vs. Boyd Gaming | Royalty Management vs. JJill Inc | Royalty Management vs. Boot Barn Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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