Correlation Between Wabash National and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Wabash National 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 Wabash National and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and Boyd Gaming, you can compare the effects of market volatilities on Wabash National 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 Wabash National with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Boyd Gaming.
Diversification Opportunities for Wabash National and Boyd Gaming
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wabash and Boyd is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Wabash National 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 Wabash National 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 Wabash National i.e., Wabash National and Boyd Gaming go up and down completely randomly.
Pair Corralation between Wabash National and Boyd Gaming
Considering the 90-day investment horizon Wabash National is expected to under-perform the Boyd Gaming. In addition to that, Wabash National is 1.34 times more volatile than Boyd Gaming. It trades about -0.01 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 5,752 in Boyd Gaming on September 2, 2024 and sell it today you would earn a total of 1,633 from holding Boyd Gaming or generate 28.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wabash National vs. Boyd Gaming
Performance |
| Timeline |
| Wabash National |
| Boyd Gaming |
Wabash National and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabash National and Boyd Gaming
The main advantage of trading using opposite Wabash National and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National 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.| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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