Correlation Between Boyd Gaming and State Street

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

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

Diversification Opportunities for Boyd Gaming and State Street

0.89

Correlation Coefficient

Boyd Gaming  State Street

Very poor diversification

The 3 months correlation between Boyd and State is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and State Street go up and down completely randomly.

Pair Corralation between Boyd Gaming and State Street

Assuming the 90 days trading horizon Boyd Gaming is expected to generate 1.17 times more return on investment than State Street. However, Boyd Gaming is 1.17 times more volatile than State Street. It trades about -0.05 of its potential returns per unit of risk. State Street is currently generating about -0.15 per unit of risk. If you would invest  6,682  in Boyd Gaming on December 21, 2024 and sell it today you would lose (432.00) from holding Boyd Gaming or give up 6.47% of portfolio value over 90 days.

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

Boyd Gaming  vs.  State Street

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.

State Street

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Boyd Gaming and State Street

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

The idea behind Boyd Gaming and State Street 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.