Correlation Between MGM Resorts and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both MGM Resorts 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 MGM Resorts and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGM Resorts International and Boyd Gaming, you can compare the effects of market volatilities on MGM Resorts 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 MGM Resorts with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGM Resorts and Boyd Gaming.
Diversification Opportunities for MGM Resorts and Boyd Gaming
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MGM and Boyd is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding MGM Resorts International and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and MGM Resorts 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 MGM Resorts International 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 MGM Resorts i.e., MGM Resorts and Boyd Gaming go up and down completely randomly.
Pair Corralation between MGM Resorts and Boyd Gaming
Assuming the 90 days horizon MGM Resorts International is expected to under-perform the Boyd Gaming. In addition to that, MGM Resorts is 1.26 times more volatile than Boyd Gaming. It trades about -0.07 of its total potential returns per unit of risk. Boyd Gaming is currently generating about 0.3 per unit of volatility. If you would invest 6,750 in Boyd Gaming on October 20, 2024 and sell it today you would earn a total of 400.00 from holding Boyd Gaming or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGM Resorts International vs. Boyd Gaming
Performance |
| Timeline |
| MGM Resorts International |
| Boyd Gaming |
MGM Resorts and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGM Resorts and Boyd Gaming
The main advantage of trading using opposite MGM Resorts and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGM Resorts 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.| MGM Resorts vs. Las Vegas Sands | MGM Resorts vs. Galaxy Entertainment Group | MGM Resorts vs. Sands China | MGM Resorts vs. Wynn Resorts Limited |
| Boyd Gaming vs. Las Vegas Sands | Boyd Gaming vs. Galaxy Entertainment Group | Boyd Gaming vs. Sands China | Boyd Gaming vs. MGM Resorts International |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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