Correlation Between Boyd Gaming and Broadwind

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

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

Diversification Opportunities for Boyd Gaming and Broadwind

-0.75

Correlation Coefficient

Boyd Gaming  Broadwind

Pay attention - limited upside

The 3 months correlation between Boyd and Broadwind is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Broadwind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadwind 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 Broadwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadwind has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Broadwind go up and down completely randomly.

Pair Corralation between Boyd Gaming and Broadwind

Assuming the 90 days trading horizon Boyd Gaming is expected to under-perform the Broadwind. But the stock apears to be less risky and, when comparing its historical volatility, Boyd Gaming is 2.16 times less risky than Broadwind. The stock trades about -0.11 of its potential returns per unit of risk. The Broadwind is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  177.00  in Broadwind on October 4, 2024 and sell it today you would lose (1.00) from holding Broadwind or give up 0.56% of portfolio value over 90 days.

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

Boyd Gaming  vs.  Broadwind

Boyd Gaming

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Boyd Gaming unveiled solid returns over the last few months and may actually be approaching a breakup point.

Broadwind

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broadwind has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Broadwind is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Boyd Gaming and Broadwind

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

The idea behind Boyd Gaming and Broadwind 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.