Correlation Between Boyd Gaming and Brookfield Renewable

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

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

Diversification Opportunities for Boyd Gaming and Brookfield Renewable

0.0

Correlation Coefficient

Boyd Gaming  Brookfield Renewable

Pay attention - limited upside

The 3 months correlation between Boyd and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Brookfield Renewable Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable 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 Brookfield Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Renewable has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Brookfield Renewable go up and down completely randomly.

Pair Corralation between Boyd Gaming and Brookfield Renewable

Considering the 90-day investment horizon Boyd Gaming is expected to generate 1.75 times more return on investment than Brookfield Renewable. However, Boyd Gaming is 1.75 times more volatile than Brookfield Renewable Partners. It trades about 0.03 of its potential returns per unit of risk. Brookfield Renewable Partners is currently generating about -0.08 per unit of risk. If you would invest  7,488  in Boyd Gaming on December 1, 2024 and sell it today you would earn a total of  138.00  from holding Boyd Gaming or generate 1.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Boyd Gaming  vs.  Brookfield Renewable Partners

Boyd Gaming

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Boyd Gaming is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Brookfield Renewable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield Renewable Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Brookfield Renewable is not utilizing all of its potentials. The recent stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Boyd Gaming and Brookfield Renewable

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

The idea behind Boyd Gaming and Brookfield Renewable Partners 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.