Correlation Between Boyd Gaming and Ringmetall

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

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

Diversification Opportunities for Boyd Gaming and Ringmetall

0.51

Correlation Coefficient

Boyd Gaming  Ringmetall

Very weak diversification

The 3 months correlation between Boyd and Ringmetall is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Ringmetall SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ringmetall SE 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 Ringmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ringmetall SE has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Ringmetall go up and down completely randomly.

Pair Corralation between Boyd Gaming and Ringmetall

Assuming the 90 days trading horizon Boyd Gaming is expected to generate 0.5 times more return on investment than Ringmetall. However, Boyd Gaming is 1.99 times less risky than Ringmetall. It trades about 0.18 of its potential returns per unit of risk. Ringmetall SE is currently generating about 0.08 per unit of risk. If you would invest  5,886  in Boyd Gaming on October 25, 2024 and sell it today you would earn a total of  1,414  from holding Boyd Gaming or generate 24.02% return on investment over 90 days.

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

Boyd Gaming  vs.  Ringmetall SE

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.

Ringmetall SE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ringmetall SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ringmetall reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boyd Gaming and Ringmetall

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

The idea behind Boyd Gaming and Ringmetall SE 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.