Correlation Between Boston Beer and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Boyd Gaming, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Boyd Gaming.
Diversification Opportunities for Boston Beer and Boyd Gaming
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boston and Boyd is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Boston Beer 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 Boston Beer 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 Boston Beer i.e., Boston Beer and Boyd Gaming go up and down completely randomly.
Pair Corralation between Boston Beer and Boyd Gaming
Considering the 90-day investment horizon Boston Beer is expected to under-perform the Boyd Gaming. In addition to that, Boston Beer is 1.26 times more volatile than Boyd Gaming. It trades about 0.0 of its total potential returns per unit of risk. Boyd Gaming is currently generating about 0.06 per unit of volatility. 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 |
Boston Beer vs. Boyd Gaming
Performance |
| Timeline |
| Boston Beer |
| Boyd Gaming |
Boston Beer and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Boyd Gaming
The main advantage of trading using opposite Boston Beer and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |