Correlation Between Kingdee International and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Kingdee International 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 Kingdee International and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingdee International Software and Boyd Gaming, you can compare the effects of market volatilities on Kingdee International 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 Kingdee International with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Boyd Gaming.
Diversification Opportunities for Kingdee International and Boyd Gaming
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingdee and Boyd is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Kingdee International 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 Kingdee International Software 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 Kingdee International i.e., Kingdee International and Boyd Gaming go up and down completely randomly.
Pair Corralation between Kingdee International and Boyd Gaming
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 2.27 times more return on investment than Boyd Gaming. However, Kingdee International is 2.27 times more volatile than Boyd Gaming. It trades about 0.12 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.09 per unit of risk. If you would invest 105.00 in Kingdee International Software on October 30, 2024 and sell it today you would earn a total of 14.00 from holding Kingdee International Software or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Boyd Gaming
Performance |
| Timeline |
| Kingdee International |
| Boyd Gaming |
Kingdee International and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Boyd Gaming
The main advantage of trading using opposite Kingdee International and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International 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.| Kingdee International vs. AIR PRODCHEMICALS | Kingdee International vs. Yuexiu Transport Infrastructure | Kingdee International vs. Quaker Chemical | Kingdee International vs. PTT Global Chemical |
| Boyd Gaming vs. Sims Metal Management | Boyd Gaming vs. Coor Service Management | Boyd Gaming vs. Darden Restaurants | Boyd Gaming vs. CENTURIA OFFICE REIT |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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