Correlation Between Boyd Gaming and Phillips
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Boyd Gaming vs. Phillips 66
Performance |
Timeline |
Boyd Gaming |
Phillips 66 |
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.Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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