Correlation Between Boyd Gaming and LION ONE

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

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

Diversification Opportunities for Boyd Gaming and LION ONE

-0.7

Correlation Coefficient

Boyd Gaming  LION ONE

Excellent diversification

The 3 months correlation between Boyd and LION is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and LION ONE go up and down completely randomly.

Pair Corralation between Boyd Gaming and LION ONE

Assuming the 90 days trading horizon Boyd Gaming is expected to generate 0.42 times more return on investment than LION ONE. However, Boyd Gaming is 2.37 times less risky than LION ONE. It trades about 0.04 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.04 per unit of risk. If you would invest  5,334  in Boyd Gaming on October 13, 2024 and sell it today you would earn a total of  1,566  from holding Boyd Gaming or generate 29.36% return on investment over 90 days.

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

Boyd Gaming  vs.  LION ONE METALS

Boyd Gaming

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 11 (%) 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.

LION ONE METALS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LION ONE METALS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, LION ONE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Boyd Gaming and LION ONE

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

The idea behind Boyd Gaming and LION ONE METALS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.