Correlation Between Melexis NV and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Melexis NV 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 Melexis NV and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melexis NV and Boyd Gaming, you can compare the effects of market volatilities on Melexis NV 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 Melexis NV with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melexis NV and Boyd Gaming.
Diversification Opportunities for Melexis NV and Boyd Gaming
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Melexis and Boyd is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Melexis NV and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Melexis NV 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 Melexis NV 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 Melexis NV i.e., Melexis NV and Boyd Gaming go up and down completely randomly.
Pair Corralation between Melexis NV and Boyd Gaming
Assuming the 90 days horizon Melexis NV is expected to generate 1.17 times less return on investment than Boyd Gaming. In addition to that, Melexis NV is 1.54 times more volatile than Boyd Gaming. It trades about 0.02 of its total potential returns per unit of risk. Boyd Gaming is currently generating about 0.04 per unit of volatility. If you would invest 5,740 in Boyd Gaming on August 30, 2024 and sell it today you would earn a total of 1,570 from holding Boyd Gaming or generate 27.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Melexis NV vs. Boyd Gaming
Performance |
Timeline |
Melexis NV |
Boyd Gaming |
Melexis NV and Boyd Gaming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Melexis NV and Boyd Gaming
The main advantage of trading using opposite Melexis NV and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melexis NV 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.Melexis NV vs. NVIDIA | Melexis NV vs. Intel | Melexis NV vs. Taiwan Semiconductor Manufacturing | Melexis NV vs. Marvell Technology Group |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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