Correlation Between Internet Thailand and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Internet Thailand 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 Internet Thailand and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Internet Thailand PCL and Boyd Gaming, you can compare the effects of market volatilities on Internet Thailand 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 Internet Thailand with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and Boyd Gaming.
Diversification Opportunities for Internet Thailand and Boyd Gaming
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Internet and Boyd is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Internet Thailand 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 Internet Thailand PCL 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 Internet Thailand i.e., Internet Thailand and Boyd Gaming go up and down completely randomly.
Pair Corralation between Internet Thailand and Boyd Gaming
Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 2.4 times more return on investment than Boyd Gaming. However, Internet Thailand is 2.4 times more volatile than Boyd Gaming. It trades about 0.19 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.22 per unit of risk. If you would invest 12.00 in Internet Thailand PCL on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Internet Thailand PCL or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Thailand PCL vs. Boyd Gaming
Performance |
| Timeline |
| Internet Thailand PCL |
| Boyd Gaming |
Internet Thailand and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and Boyd Gaming
The main advantage of trading using opposite Internet Thailand and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand 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.| Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc |
| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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