Correlation Between Boyd Gaming and United Homes
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and United Homes 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 United Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and United Homes Group, you can compare the effects of market volatilities on Boyd Gaming and United Homes 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 United Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and United Homes.
Diversification Opportunities for Boyd Gaming and United Homes
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Boyd and United is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and United Homes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Homes Group 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 United Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Homes Group has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and United Homes go up and down completely randomly.
Pair Corralation between Boyd Gaming and United Homes
Considering the 90-day investment horizon Boyd Gaming is expected to generate 0.14 times more return on investment than United Homes. However, Boyd Gaming is 6.98 times less risky than United Homes. It trades about 0.14 of its potential returns per unit of risk. United Homes Group is currently generating about -0.28 per unit of risk. If you would invest 7,387 in Boyd Gaming on September 13, 2024 and sell it today you would earn a total of 177.00 from holding Boyd Gaming or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. United Homes Group
Performance |
| Timeline |
| Boyd Gaming |
| United Homes Group |
Boyd Gaming and United Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and United Homes
The main advantage of trading using opposite Boyd Gaming and United Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, United Homes 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 United Homes will offset losses from the drop in United Homes' long position.The idea behind Boyd Gaming and United Homes Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| United Homes vs. Stepstone Group | United Homes vs. SEI Investments | United Homes vs. Morgan Stanley | United Homes vs. Aldel Financial II |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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