Correlation Between AS Latvijas and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both AS Latvijas 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 AS Latvijas and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AS Latvijas balzams and Boyd Gaming, you can compare the effects of market volatilities on AS Latvijas 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 AS Latvijas with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of AS Latvijas and Boyd Gaming.
Diversification Opportunities for AS Latvijas and Boyd Gaming
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UM9 and Boyd is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding AS Latvijas balzams and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and AS Latvijas 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 AS Latvijas balzams 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 AS Latvijas i.e., AS Latvijas and Boyd Gaming go up and down completely randomly.
Pair Corralation between AS Latvijas and Boyd Gaming
Assuming the 90 days trading horizon AS Latvijas balzams is expected to under-perform the Boyd Gaming. But the stock apears to be less risky and, when comparing its historical volatility, AS Latvijas balzams is 4.77 times less risky than Boyd Gaming. The stock trades about -0.02 of its potential returns per unit of risk. The Boyd Gaming is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,486 in Boyd Gaming on September 3, 2024 and sell it today you would earn a total of 1,414 from holding Boyd Gaming or generate 25.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AS Latvijas balzams vs. Boyd Gaming
Performance |
| Timeline |
| AS Latvijas balzams |
| Boyd Gaming |
AS Latvijas and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AS Latvijas and Boyd Gaming
The main advantage of trading using opposite AS Latvijas and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AS Latvijas 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.| AS Latvijas vs. Tsingtao Brewery | AS Latvijas vs. TRAINLINE PLC LS | AS Latvijas vs. Fukuyama Transporting Co | AS Latvijas vs. Liberty Broadband |
| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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