Correlation Between Boyd Gaming and Roblox Corp

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

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

Diversification Opportunities for Boyd Gaming and Roblox Corp

0.71

Correlation Coefficient

Boyd Gaming  Roblox Corp

Poor diversification

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

Pair Corralation between Boyd Gaming and Roblox Corp

Considering the 90-day investment horizon Boyd Gaming is expected to under-perform the Roblox Corp. But the stock apears to be less risky and, when comparing its historical volatility, Boyd Gaming is 1.76 times less risky than Roblox Corp. The stock trades about -0.07 of its potential returns per unit of risk. The Roblox Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  6,125  in Roblox Corp on December 17, 2024 and sell it today you would lose (474.00) from holding Roblox Corp or give up 7.74% of portfolio value over 90 days.

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

Boyd Gaming  vs.  Roblox Corp

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 latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Roblox Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roblox Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Roblox Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boyd Gaming and Roblox Corp

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

The idea behind Boyd Gaming and Roblox 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.