Correlation Between American Public and Boyd Gaming

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both American Public 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 American Public and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and Boyd Gaming, you can compare the effects of market volatilities on American Public 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 American Public with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and Boyd Gaming.

Diversification Opportunities for American Public and Boyd Gaming

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between American and Boyd is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and American Public 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 American Public Education 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 American Public i.e., American Public and Boyd Gaming go up and down completely randomly.

Pair Corralation between American Public and Boyd Gaming

Assuming the 90 days horizon American Public Education is expected to generate 2.29 times more return on investment than Boyd Gaming. However, American Public is 2.29 times more volatile than Boyd Gaming. It trades about 0.09 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.05 per unit of risk. If you would invest  1,000.00  in American Public Education on October 5, 2024 and sell it today you would earn a total of  1,060  from holding American Public Education or generate 106.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

American Public Education  vs.  Boyd Gaming

 Performance 
       Timeline  
American Public Education 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days American Public Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, American Public reported solid returns over the last few months and may actually be approaching a breakup point.
Boyd Gaming 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Good
Over the last 90 days Boyd Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Boyd Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

American Public and Boyd Gaming Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with American Public and Boyd Gaming

The main advantage of trading using opposite American Public and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public 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.
The idea behind American Public Education 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.
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Other Complementary Tools

ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Fundamental Analysis
View fundamental data based on most recent published financial statements
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments