Correlation Between RCI Hospitality and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both RCI Hospitality 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 RCI Hospitality and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCI Hospitality Holdings and Boyd Gaming, you can compare the effects of market volatilities on RCI Hospitality 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 RCI Hospitality with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCI Hospitality and Boyd Gaming.
Diversification Opportunities for RCI Hospitality and Boyd Gaming
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RCI and Boyd is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding RCI Hospitality Holdings and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and RCI Hospitality 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 RCI Hospitality Holdings 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 RCI Hospitality i.e., RCI Hospitality and Boyd Gaming go up and down completely randomly.
Pair Corralation between RCI Hospitality and Boyd Gaming
Given the investment horizon of 90 days RCI Hospitality Holdings is expected to under-perform the Boyd Gaming. In addition to that, RCI Hospitality is 1.25 times more volatile than Boyd Gaming. It trades about -0.04 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 5,495 in Boyd Gaming on August 31, 2024 and sell it today you would earn a total of 1,890 from holding Boyd Gaming or generate 34.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCI Hospitality Holdings vs. Boyd Gaming
Performance |
| Timeline |
| RCI Hospitality Holdings |
| Boyd Gaming |
RCI Hospitality and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCI Hospitality and Boyd Gaming
The main advantage of trading using opposite RCI Hospitality and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCI Hospitality 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.| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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