Correlation Between Easy Software and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Easy Software and Boyd Gaming 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 Easy Software and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and Boyd Gaming, you can compare the effects of market volatilities on Easy Software and Boyd Gaming 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 Easy Software with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and Boyd Gaming.
Diversification Opportunities for Easy Software and Boyd Gaming
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Easy and Boyd is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Easy Software 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 Easy Software AG are associated (or correlated) with Boyd Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyd Gaming has no effect on the direction of Easy Software i.e., Easy Software and Boyd Gaming go up and down completely randomly.
Pair Corralation between Easy Software and Boyd Gaming
Assuming the 90 days trading horizon Easy Software is expected to generate 1.81 times less return on investment than Boyd Gaming. In addition to that, Easy Software is 1.23 times more volatile than Boyd Gaming. It trades about 0.06 of its total potential returns per unit of risk. Boyd Gaming is currently generating about 0.13 per unit of volatility. If you would invest 4,952 in Boyd Gaming on October 17, 2024 and sell it today you would earn a total of 2,048 from holding Boyd Gaming or generate 41.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.32% |
| Values | Daily Returns |
Easy Software AG vs. Boyd Gaming
Performance |
| Timeline |
| Easy Software AG |
| Boyd Gaming |
Easy Software and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and Boyd Gaming
The main advantage of trading using opposite Easy Software and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software position performs unexpectedly, Boyd Gaming 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 Boyd Gaming will offset losses from the drop in Boyd Gaming's long position.| Easy Software vs. International Game Technology | Easy Software vs. Seven West Media | Easy Software vs. Hochschild Mining plc | Easy Software vs. PLAYMATES TOYS |
| Boyd Gaming vs. Easy Software AG | Boyd Gaming vs. FORMPIPE SOFTWARE AB | Boyd Gaming vs. ASURE SOFTWARE | Boyd Gaming vs. COMPUTERSHARE |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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