Correlation Between Gauzy and Boyd Gaming

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

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

Diversification Opportunities for Gauzy and Boyd Gaming

0.43

Correlation Coefficient

Gauzy  Boyd Gaming

Very weak diversification

The 3 months correlation between Gauzy and Boyd is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gauzy Ltd Ordinary and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Gauzy 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 Gauzy Ltd Ordinary 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 Gauzy i.e., Gauzy and Boyd Gaming go up and down completely randomly.

Pair Corralation between Gauzy and Boyd Gaming

Given the investment horizon of 90 days Gauzy Ltd Ordinary is expected to generate 3.93 times more return on investment than Boyd Gaming. However, Gauzy is 3.93 times more volatile than Boyd Gaming. It trades about 0.08 of its potential returns per unit of risk. Boyd Gaming is currently generating about -0.01 per unit of risk. If you would invest  814.00  in Gauzy Ltd Ordinary on December 18, 2024 and sell it today you would earn a total of  152.00  from holding Gauzy Ltd Ordinary or generate 18.67% return on investment over 90 days.

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

Gauzy Ltd Ordinary  vs.  Boyd Gaming

Gauzy Ordinary

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gauzy Ltd Ordinary are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Gauzy showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Gauzy and Boyd Gaming

The main advantage of trading using opposite Gauzy and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gauzy 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 Gauzy Ltd Ordinary 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.