Correlation Between Boyd Gaming and Golden Star

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

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

Diversification Opportunities for Boyd Gaming and Golden Star

0.34

Correlation Coefficient

Boyd Gaming  Golden Star

Weak diversification

The 3 months correlation between Boyd and Golden is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Golden Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Acquisition 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 Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Acquisition has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Golden Star go up and down completely randomly.

Pair Corralation between Boyd Gaming and Golden Star

Considering the 90-day investment horizon Boyd Gaming is expected to under-perform the Golden Star. In addition to that, Boyd Gaming is 3.36 times more volatile than Golden Star Acquisition. It trades about -0.05 of its total potential returns per unit of risk. Golden Star Acquisition is currently generating about -0.02 per unit of volatility. If you would invest  1,149  in Golden Star Acquisition on October 9, 2024 and sell it today you would lose (2.00) from holding Golden Star Acquisition or give up 0.17% of portfolio value over 90 days.

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

Boyd Gaming  vs.  Golden Star Acquisition

Boyd Gaming

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Boyd Gaming exhibited solid returns over the last few months and may actually be approaching a breakup point.

Golden Star Acquisition

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Star Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Golden Star is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Boyd Gaming and Golden Star

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

The idea behind Boyd Gaming and Golden Star Acquisition 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.