Correlation Between Boyd Gaming and Caseys General

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

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

Diversification Opportunities for Boyd Gaming and Caseys General

0.76

Correlation Coefficient

Boyd Gaming  Caseys General

Poor diversification

The 3 months correlation between Boyd and Caseys is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores 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 Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Caseys General go up and down completely randomly.

Pair Corralation between Boyd Gaming and Caseys General

Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.26 times more return on investment than Caseys General. However, Boyd Gaming is 1.26 times more volatile than Caseys General Stores. It trades about 0.25 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.06 per unit of risk. If you would invest  6,850  in Boyd Gaming on October 26, 2024 and sell it today you would earn a total of  400.00  from holding Boyd Gaming or generate 5.84% return on investment over 90 days.

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

Boyd Gaming  vs.  Caseys General Stores

Boyd Gaming

Risk-Adjusted Performance

8 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Boyd Gaming may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Caseys General Stores

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Caseys General may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Boyd Gaming and Caseys General

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

The idea behind Boyd Gaming and Caseys General Stores 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.