Correlation Between Games Workshop and Boyd Gaming

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

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

Diversification Opportunities for Games Workshop and Boyd Gaming

-0.02

Correlation Coefficient

Games Workshop  Boyd Gaming

Good diversification

The 3 months correlation between Games and Boyd is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Games Workshop 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 Games Workshop 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 Games Workshop i.e., Games Workshop and Boyd Gaming go up and down completely randomly.

Pair Corralation between Games Workshop and Boyd Gaming

Assuming the 90 days horizon Games Workshop Group is expected to generate 1.77 times more return on investment than Boyd Gaming. However, Games Workshop is 1.77 times more volatile than Boyd Gaming. It trades about 0.03 of its potential returns per unit of risk. Boyd Gaming is currently generating about -0.04 per unit of risk. If you would invest  17,800  in Games Workshop Group on December 19, 2024 and sell it today you would earn a total of  500.00  from holding Games Workshop Group or generate 2.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.44%
Values	Daily Returns

Games Workshop Group  vs.  Boyd Gaming

Games Workshop Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking signals, Games Workshop is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 Games Workshop and Boyd Gaming

The main advantage of trading using opposite Games Workshop and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop 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 Games Workshop 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.