Correlation Between Boyd Gaming and TSOGO SUN

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

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

Diversification Opportunities for Boyd Gaming and TSOGO SUN

0.45

Correlation Coefficient

Boyd Gaming  TSOGO SUN

Very weak diversification

The 3 months correlation between Boyd and TSOGO is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and TSOGO SUN GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSOGO SUN GAMING and Boyd Gaming 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 Boyd Gaming are associated (or correlated) with TSOGO SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSOGO SUN GAMING has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and TSOGO SUN go up and down completely randomly.

Pair Corralation between Boyd Gaming and TSOGO SUN

Assuming the 90 days horizon Boyd Gaming is expected to generate 0.68 times more return on investment than TSOGO SUN. However, Boyd Gaming is 1.48 times less risky than TSOGO SUN. It trades about -0.06 of its potential returns per unit of risk. TSOGO SUN GAMING is currently generating about -0.14 per unit of risk. If you would invest  6,831  in Boyd Gaming on December 28, 2024 and sell it today you would lose (531.00) from holding Boyd Gaming or give up 7.77% of portfolio value over 90 days.

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

Boyd Gaming  vs.  TSOGO SUN GAMING

Boyd Gaming

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boyd Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

TSOGO SUN GAMING

Risk-Adjusted Performance

Very Weak

Over the last 90 days TSOGO SUN GAMING has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Boyd Gaming and TSOGO SUN

The main advantage of trading using opposite Boyd Gaming and TSOGO SUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, TSOGO SUN 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 TSOGO SUN will offset losses from the drop in TSOGO SUN's long position.

The idea behind Boyd Gaming and TSOGO SUN 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .