Correlation Between Internet Thailand and Boyd Gaming

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

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

Diversification Opportunities for Internet Thailand and Boyd Gaming

0.65

Correlation Coefficient

Internet Thailand  Boyd Gaming

Poor diversification

The 3 months correlation between Internet and Boyd is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Internet Thailand 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 Internet Thailand PCL 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 Internet Thailand i.e., Internet Thailand and Boyd Gaming go up and down completely randomly.

Pair Corralation between Internet Thailand and Boyd Gaming

Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 2.71 times more return on investment than Boyd Gaming. However, Internet Thailand is 2.71 times more volatile than Boyd Gaming. It trades about -0.02 of its potential returns per unit of risk. Boyd Gaming is currently generating about -0.07 per unit of risk. If you would invest  16.00  in Internet Thailand PCL on December 30, 2024 and sell it today you would lose (2.00) from holding Internet Thailand PCL or give up 12.5% of portfolio value over 90 days.

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

Internet Thailand PCL  vs.  Boyd Gaming

Internet Thailand PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Internet Thailand PCL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Internet Thailand is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Internet Thailand and Boyd Gaming

The main advantage of trading using opposite Internet Thailand and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand 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 Internet Thailand PCL 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.