Correlation Between CAVA Group, and Boyd Gaming

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

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

Diversification Opportunities for CAVA Group, and Boyd Gaming

0.24

Correlation Coefficient

CAVA Group,  Boyd Gaming

Modest diversification

The 3 months correlation between CAVA and Boyd is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and CAVA Group, 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 CAVA Group, are associated (or correlated) with Boyd Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyd Gaming has no effect on the direction of CAVA Group, i.e., CAVA Group, and Boyd Gaming go up and down completely randomly.

Pair Corralation between CAVA Group, and Boyd Gaming

Given the investment horizon of 90 days CAVA Group, is expected to generate 1.28 times less return on investment than Boyd Gaming. In addition to that, CAVA Group, is 1.97 times more volatile than Boyd Gaming. It trades about 0.06 of its total potential returns per unit of risk. Boyd Gaming is currently generating about 0.15 per unit of volatility. If you would invest  5,350  in Boyd Gaming on September 29, 2024 and sell it today you would earn a total of  1,865  from holding Boyd Gaming or generate 34.86% return on investment over 90 days.

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

CAVA Group,  vs.  Boyd Gaming

CAVA Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CAVA Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CAVA Group, is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Boyd Gaming

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 9 (%) 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.

Pair Trading with CAVA Group, and Boyd Gaming

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

The idea behind CAVA Group, and Boyd Gaming 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.