Correlation Between Boyd Gaming and Eldorado Gold

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

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

Diversification Opportunities for Boyd Gaming and Eldorado Gold

-0.71

Correlation Coefficient

Boyd Gaming  Eldorado Gold

Pay attention - limited upside

The 3 months correlation between Boyd and Eldorado is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp 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 Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Eldorado Gold go up and down completely randomly.

Pair Corralation between Boyd Gaming and Eldorado Gold

Considering the 90-day investment horizon Boyd Gaming is expected to generate 1.93 times less return on investment than Eldorado Gold. But when comparing it to its historical volatility, Boyd Gaming is 1.37 times less risky than Eldorado Gold. It trades about 0.04 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  869.00  in Eldorado Gold Corp on September 26, 2024 and sell it today you would earn a total of  635.00  from holding Eldorado Gold Corp or generate 73.07% 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.  Eldorado Gold Corp

Boyd Gaming

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Boyd Gaming may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eldorado Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eldorado Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Boyd Gaming and Eldorado Gold

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

The idea behind Boyd Gaming and Eldorado Gold Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.