Correlation Between Las Vegas and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Las Vegas 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 Las Vegas and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Las Vegas Sands and Boyd Gaming, you can compare the effects of market volatilities on Las Vegas 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 Las Vegas with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Las Vegas and Boyd Gaming.
Diversification Opportunities for Las Vegas and Boyd Gaming
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Las and Boyd is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Las Vegas Sands and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Las Vegas 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 Las Vegas Sands 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 Las Vegas i.e., Las Vegas and Boyd Gaming go up and down completely randomly.
Pair Corralation between Las Vegas and Boyd Gaming
Considering the 90-day investment horizon Las Vegas Sands is expected to under-perform the Boyd Gaming. But the stock apears to be less risky and, when comparing its historical volatility, Las Vegas Sands is 1.03 times less risky than Boyd Gaming. The stock trades about -0.15 of its potential returns per unit of risk. The Boyd Gaming is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,936 in Boyd Gaming on August 26, 2024 and sell it today you would earn a total of 297.00 from holding Boyd Gaming or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Las Vegas Sands vs. Boyd Gaming
Performance |
| Timeline |
| Las Vegas Sands |
| Boyd Gaming |
Las Vegas and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Las Vegas and Boyd Gaming
The main advantage of trading using opposite Las Vegas and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Las Vegas 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.| Las Vegas vs. MGM Resorts International | Las Vegas vs. Caesars Entertainment | Las Vegas vs. Penn National Gaming | Las Vegas vs. Melco Resorts Entertainment |
| Boyd Gaming vs. MGM Resorts International | Boyd Gaming vs. Las Vegas Sands | Boyd Gaming vs. Wynn Resorts Limited | Boyd Gaming vs. Penn National Gaming |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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