Correlation Between Boyd Gaming and SUNOCO

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

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

Diversification Opportunities for Boyd Gaming and SUNOCO

-0.12

Correlation Coefficient

Boyd Gaming  SUNOCO

Good diversification

The 3 months correlation between Boyd and SUNOCO is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and SUNOCO LOGISTICS PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNOCO LOGISTICS PARTNERS 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 SUNOCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNOCO LOGISTICS PARTNERS has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and SUNOCO go up and down completely randomly.

Pair Corralation between Boyd Gaming and SUNOCO

Considering the 90-day investment horizon Boyd Gaming is expected to under-perform the SUNOCO. But the stock apears to be less risky and, when comparing its historical volatility, Boyd Gaming is 1.94 times less risky than SUNOCO. The stock trades about -0.04 of its potential returns per unit of risk. The SUNOCO LOGISTICS PARTNERS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,637  in SUNOCO LOGISTICS PARTNERS on December 22, 2024 and sell it today you would earn a total of  87.00  from holding SUNOCO LOGISTICS PARTNERS or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.33%
Values	Daily Returns

Boyd Gaming  vs.  SUNOCO LOGISTICS PARTNERS

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 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.

SUNOCO LOGISTICS PARTNERS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SUNOCO LOGISTICS PARTNERS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SUNOCO 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 SUNOCO

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

The idea behind Boyd Gaming and SUNOCO LOGISTICS 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.