Correlation Between Oak Woods and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Oak Woods 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 Oak Woods and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Woods Acquisition and Boyd Gaming, you can compare the effects of market volatilities on Oak Woods 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 Oak Woods with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Woods and Boyd Gaming.
Diversification Opportunities for Oak Woods and Boyd Gaming
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oak and Boyd is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Oak Woods Acquisition and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Oak Woods 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 Oak Woods Acquisition 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 Oak Woods i.e., Oak Woods and Boyd Gaming go up and down completely randomly.
Pair Corralation between Oak Woods and Boyd Gaming
Assuming the 90 days horizon Oak Woods is expected to generate 3.58 times less return on investment than Boyd Gaming. But when comparing it to its historical volatility, Oak Woods Acquisition is 2.19 times less risky than Boyd Gaming. It trades about 0.04 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,699 in Boyd Gaming on September 1, 2024 and sell it today you would earn a total of 1,686 from holding Boyd Gaming or generate 29.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oak Woods Acquisition vs. Boyd Gaming
Performance |
| Timeline |
| Oak Woods Acquisition |
| Boyd Gaming |
Oak Woods and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Woods and Boyd Gaming
The main advantage of trading using opposite Oak Woods and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Woods 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.| Oak Woods vs. Avient Corp | Oak Woods vs. Minerals Technologies | Oak Woods vs. Eldorado Gold Corp | Oak Woods vs. Evolution Gaming Group |
| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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