Correlation Between Melco Resorts and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Melco 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 Melco 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 Melco Resorts Entertainment and Boyd Gaming, you can compare the effects of market volatilities on Melco 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 Melco Resorts with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melco Resorts and Boyd Gaming.
Diversification Opportunities for Melco Resorts and Boyd Gaming
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Melco and Boyd is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Melco Resorts Entertainment and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Melco 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 Melco Resorts Entertainment 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 Melco Resorts i.e., Melco Resorts and Boyd Gaming go up and down completely randomly.
Pair Corralation between Melco Resorts and Boyd Gaming
Given the investment horizon of 90 days Melco Resorts Entertainment is expected to generate 2.83 times more return on investment than Boyd Gaming. However, Melco Resorts is 2.83 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 0.13 per unit of risk. If you would invest 629.00 in Melco Resorts Entertainment on September 13, 2024 and sell it today you would earn a total of 59.50 from holding Melco Resorts Entertainment or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melco Resorts Entertainment vs. Boyd Gaming
Performance |
| Timeline |
| Melco Resorts Entert |
| Boyd Gaming |
Melco Resorts and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melco Resorts and Boyd Gaming
The main advantage of trading using opposite Melco Resorts and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melco 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.| Melco Resorts vs. Wynn Resorts Limited | Melco Resorts vs. MGM Resorts International | Melco Resorts vs. Caesars Entertainment | Melco Resorts 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |