Correlation Between CPU SOFTWAREHOUSE and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPU SOFTWAREHOUSE and Boyd Gaming, you can compare the effects of market volatilities on CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPU SOFTWAREHOUSE and Boyd Gaming.
Diversification Opportunities for CPU SOFTWAREHOUSE and Boyd Gaming
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CPU and Boyd is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CPU SOFTWAREHOUSE and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE i.e., CPU SOFTWAREHOUSE and Boyd Gaming go up and down completely randomly.
Pair Corralation between CPU SOFTWAREHOUSE and Boyd Gaming
Assuming the 90 days trading horizon CPU SOFTWAREHOUSE is expected to generate 2.5 times more return on investment than Boyd Gaming. However, CPU SOFTWAREHOUSE is 2.5 times more volatile than Boyd Gaming. It trades about 0.1 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.13 per unit of risk. If you would invest 94.00 in CPU SOFTWAREHOUSE on October 15, 2024 and sell it today you would earn a total of 25.00 from holding CPU SOFTWAREHOUSE or generate 26.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
CPU SOFTWAREHOUSE vs. Boyd Gaming
Performance |
Timeline |
CPU SOFTWAREHOUSE |
Boyd Gaming |
CPU SOFTWAREHOUSE and Boyd Gaming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CPU SOFTWAREHOUSE and Boyd Gaming
The main advantage of trading using opposite CPU SOFTWAREHOUSE and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPU SOFTWAREHOUSE 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.CPU SOFTWAREHOUSE vs. AGF Management Limited | ||
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Check out your portfolio center.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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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