Correlation Between Flanigans Enterprises and Boyd Gaming

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

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

Diversification Opportunities for Flanigans Enterprises and Boyd Gaming

0.5

Correlation Coefficient

Flanigans Enterprises  Boyd Gaming

Very weak diversification

The 3 months correlation between Flanigans and Boyd is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Flanigans Enterprises 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 Flanigans Enterprises 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 Flanigans Enterprises i.e., Flanigans Enterprises and Boyd Gaming go up and down completely randomly.

Pair Corralation between Flanigans Enterprises and Boyd Gaming

Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 33.35 times more return on investment than Boyd Gaming. However, Flanigans Enterprises is 33.35 times more volatile than Boyd Gaming. It trades about 0.05 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.06 per unit of risk. If you would invest  2,797  in Flanigans Enterprises on December 3, 2024 and sell it today you would lose (297.00) from holding Flanigans Enterprises or give up 10.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.6%
Values	Daily Returns

Flanigans Enterprises  vs.  Boyd Gaming

Flanigans Enterprises

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Flanigans Enterprises are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Flanigans Enterprises is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Boyd Gaming

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Boyd Gaming is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Flanigans Enterprises and Boyd Gaming

The main advantage of trading using opposite Flanigans Enterprises and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises 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 Flanigans Enterprises 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.