Correlation Between Boyd Gaming and CITIGROUP

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Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and CITIGROUP 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 CITIGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and CITIGROUP INC, you can compare the effects of market volatilities on Boyd Gaming and CITIGROUP 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 CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and CITIGROUP.

Diversification Opportunities for Boyd Gaming and CITIGROUP

-0.74
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Boyd and CITIGROUP is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and CITIGROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP 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 CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and CITIGROUP go up and down completely randomly.

Pair Corralation between Boyd Gaming and CITIGROUP

Considering the 90-day investment horizon Boyd Gaming is expected to generate 2.55 times more return on investment than CITIGROUP. However, Boyd Gaming is 2.55 times more volatile than CITIGROUP INC. It trades about 0.02 of its potential returns per unit of risk. CITIGROUP INC is currently generating about 0.01 per unit of risk. If you would invest  6,732  in Boyd Gaming on September 1, 2024 and sell it today you would earn a total of  653.00  from holding Boyd Gaming or generate 9.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.73%
ValuesDaily Returns

Boyd Gaming  vs.  CITIGROUP INC

 Performance 
       Timeline  
Boyd Gaming 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Boyd Gaming exhibited solid returns over the last few months and may actually be approaching a breakup point.
CITIGROUP INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CITIGROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CITIGROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Boyd Gaming and CITIGROUP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Boyd Gaming and CITIGROUP

The main advantage of trading using opposite Boyd Gaming and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, CITIGROUP 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 CITIGROUP will offset losses from the drop in CITIGROUP's long position.
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The idea behind Boyd Gaming and CITIGROUP INC 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.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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