Correlation Between Analog Devices and Boyd Gaming

Can any of the company-specific risk be diversified away by investing in both Analog Devices 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 Analog Devices and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Analog Devices and Boyd Gaming, you can compare the effects of market volatilities on Analog Devices 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 Analog Devices with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Boyd Gaming.

Diversification Opportunities for Analog Devices and Boyd Gaming

-0.63

Correlation Coefficient

Analog Devices  Boyd Gaming

Excellent diversification

The 3 months correlation between Analog and Boyd is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Analog Devices 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 Analog Devices 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 Analog Devices i.e., Analog Devices and Boyd Gaming go up and down completely randomly.

Pair Corralation between Analog Devices and Boyd Gaming

Considering the 90-day investment horizon Analog Devices is expected to under-perform the Boyd Gaming. In addition to that, Analog Devices is 1.05 times more volatile than Boyd Gaming. It trades about -0.05 of its total potential returns per unit of risk. Boyd Gaming is currently generating about 0.15 per unit of volatility. If you would invest  6,307  in Boyd Gaming on October 8, 2024 and sell it today you would earn a total of  985.00  from holding Boyd Gaming or generate 15.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Analog Devices  vs.  Boyd Gaming

Analog Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Analog Devices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Analog Devices is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Boyd Gaming

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Boyd Gaming exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analog Devices and Boyd Gaming

The main advantage of trading using opposite Analog Devices and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices 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 Analog Devices 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.