Correlation Between Boyd Gaming and ZIJIN MINH

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

By analyzing existing cross correlation between Boyd Gaming and ZIJIN MINH UNSPADR20, you can compare the effects of market volatilities on Boyd Gaming and ZIJIN MINH 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 ZIJIN MINH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and ZIJIN MINH.

Diversification Opportunities for Boyd Gaming and ZIJIN MINH

-0.2

Correlation Coefficient

Boyd Gaming  ZIJIN MINH

Good diversification

The 3 months correlation between Boyd and ZIJIN is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and ZIJIN MINH UNSPADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIJIN MINH UNSPADR20 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 ZIJIN MINH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIJIN MINH UNSPADR20 has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and ZIJIN MINH go up and down completely randomly.

Pair Corralation between Boyd Gaming and ZIJIN MINH

Assuming the 90 days trading horizon Boyd Gaming is expected to under-perform the ZIJIN MINH. But the stock apears to be less risky and, when comparing its historical volatility, Boyd Gaming is 1.23 times less risky than ZIJIN MINH. The stock trades about -0.05 of its potential returns per unit of risk. The ZIJIN MINH UNSPADR20 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,340  in ZIJIN MINH UNSPADR20 on December 21, 2024 and sell it today you would earn a total of  600.00  from holding ZIJIN MINH UNSPADR20 or generate 17.96% 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.  ZIJIN MINH UNSPADR20

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. In spite of comparatively stable basic indicators, Boyd Gaming is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ZIJIN MINH UNSPADR20

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZIJIN MINH UNSPADR20 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ZIJIN MINH reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boyd Gaming and ZIJIN MINH

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

The idea behind Boyd Gaming and ZIJIN MINH UNSPADR20 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 Transaction History module to view history of all your transactions and understand their impact on performance.