Correlation Between Boyd Gaming and ANDREW PELLER

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

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

Diversification Opportunities for Boyd Gaming and ANDREW PELLER

-0.39

Correlation Coefficient

Boyd Gaming  ANDREW PELLER

Very good diversification

The 3 months correlation between Boyd and ANDREW is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and ANDREW PELLER LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANDREW PELLER LTD 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 ANDREW PELLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANDREW PELLER LTD has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and ANDREW PELLER go up and down completely randomly.

Pair Corralation between Boyd Gaming and ANDREW PELLER

Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.03 times more return on investment than ANDREW PELLER. However, Boyd Gaming is 1.03 times more volatile than ANDREW PELLER LTD. It trades about 0.18 of its potential returns per unit of risk. ANDREW PELLER LTD is currently generating about -0.06 per unit of risk. If you would invest  5,587  in Boyd Gaming on October 10, 2024 and sell it today you would earn a total of  1,413  from holding Boyd Gaming or generate 25.29% return on investment over 90 days.

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

Boyd Gaming  vs.  ANDREW PELLER LTD

Boyd Gaming

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 14 (%) 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.

ANDREW PELLER LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANDREW PELLER LTD 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.

Pair Trading with Boyd Gaming and ANDREW PELLER

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

The idea behind Boyd Gaming and ANDREW PELLER LTD 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.