Correlation Between Boyd Gaming and Unum

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

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

Diversification Opportunities for Boyd Gaming and Unum

-0.21

Correlation Coefficient

Boyd Gaming  Unum

Very good diversification

The 3 months correlation between Boyd and Unum is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Unum go up and down completely randomly.

Pair Corralation between Boyd Gaming and Unum

Considering the 90-day investment horizon Boyd Gaming is expected to under-perform the Unum. In addition to that, Boyd Gaming is 1.84 times more volatile than Unum Group. It trades about -0.07 of its total potential returns per unit of risk. Unum Group is currently generating about 0.05 per unit of volatility. If you would invest  2,454  in Unum Group on December 17, 2024 and sell it today you would earn a total of  55.00  from holding Unum Group or generate 2.24% return on investment over 90 days.

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

Boyd Gaming  vs.  Unum Group

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.

Unum Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Unum Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Unum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boyd Gaming and Unum

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

The idea behind Boyd Gaming and Unum Group 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.