Correlation Between Noble Plc and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Noble Plc 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 Noble Plc and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble plc and Boyd Gaming, you can compare the effects of market volatilities on Noble Plc 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 Noble Plc with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Plc and Boyd Gaming.
Diversification Opportunities for Noble Plc and Boyd Gaming
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Noble and Boyd is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Noble plc and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Noble Plc 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 Noble plc 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 Noble Plc i.e., Noble Plc and Boyd Gaming go up and down completely randomly.
Pair Corralation between Noble Plc and Boyd Gaming
Allowing for the 90-day total investment horizon Noble plc is expected to generate 2.48 times more return on investment than Boyd Gaming. However, Noble Plc is 2.48 times more volatile than Boyd Gaming. It trades about 0.11 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.08 per unit of risk. If you would invest 3,122 in Noble plc on August 30, 2024 and sell it today you would earn a total of 221.00 from holding Noble plc or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noble plc vs. Boyd Gaming
Performance |
| Timeline |
| Noble plc |
| Boyd Gaming |
Noble Plc and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Plc and Boyd Gaming
The main advantage of trading using opposite Noble Plc and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Plc 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.| Noble Plc vs. Seadrill Limited | Noble Plc vs. Borr Drilling | Noble Plc vs. Patterson UTI Energy | Noble Plc vs. Transocean |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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