Correlation Between CITIGROUP and Boyd Gaming

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Can any of the company-specific risk be diversified away by investing in both CITIGROUP 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 CITIGROUP and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIGROUP INC and Boyd Gaming, you can compare the effects of market volatilities on CITIGROUP 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 CITIGROUP with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIGROUP and Boyd Gaming.

Diversification Opportunities for CITIGROUP and Boyd Gaming

-0.75
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CITIGROUP and Boyd is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CITIGROUP INC and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and CITIGROUP 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 CITIGROUP INC 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 CITIGROUP i.e., CITIGROUP and Boyd Gaming go up and down completely randomly.

Pair Corralation between CITIGROUP and Boyd Gaming

Assuming the 90 days trading horizon CITIGROUP INC is expected to under-perform the Boyd Gaming. But the bond apears to be less risky and, when comparing its historical volatility, CITIGROUP INC is 1.44 times less risky than Boyd Gaming. The bond trades about -0.23 of its potential returns per unit of risk. The Boyd Gaming is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7,165  in Boyd Gaming on August 29, 2024 and sell it today you would earn a total of  140.00  from holding Boyd Gaming or generate 1.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

CITIGROUP INC  vs.  Boyd Gaming

 Performance 
       Timeline  
CITIGROUP INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CITIGROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CITIGROUP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Boyd Gaming 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Boyd Gaming exhibited solid returns over the last few months and may actually be approaching a breakup point.

CITIGROUP and Boyd Gaming Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CITIGROUP and Boyd Gaming

The main advantage of trading using opposite CITIGROUP and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIGROUP 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.
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The idea behind CITIGROUP INC and Boyd Gaming pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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