Correlation Between Boyd Gaming and Phillips

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Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Phillips 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 Phillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Phillips 66, you can compare the effects of market volatilities on Boyd Gaming and Phillips 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 Phillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Phillips.

Diversification Opportunities for Boyd Gaming and Phillips

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Boyd and Phillips is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Phillips 66 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips 66 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 Phillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phillips 66 has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Phillips go up and down completely randomly.

Pair Corralation between Boyd Gaming and Phillips

Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.08 times more return on investment than Phillips. However, Boyd Gaming is 1.08 times more volatile than Phillips 66. It trades about 0.14 of its potential returns per unit of risk. Phillips 66 is currently generating about -0.05 per unit of risk. If you would invest  4,972  in Boyd Gaming on October 4, 2024 and sell it today you would earn a total of  1,878  from holding Boyd Gaming or generate 37.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Boyd Gaming  vs.  Phillips 66

 Performance 
       Timeline  
Boyd Gaming 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 9 (%) 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.
Phillips 66 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Phillips 66 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Boyd Gaming and Phillips Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Boyd Gaming and Phillips

The main advantage of trading using opposite Boyd Gaming and Phillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Phillips 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 Phillips will offset losses from the drop in Phillips' long position.
The idea behind Boyd Gaming and Phillips 66 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 Anywhere module to track or share privately all of your investments from the convenience of any device.

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