Correlation Between Playa Hotels and Boyd Gaming

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Can any of the company-specific risk be diversified away by investing in both Playa Hotels 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 Playa Hotels and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playa Hotels Resorts and Boyd Gaming, you can compare the effects of market volatilities on Playa Hotels 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 Playa Hotels with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Boyd Gaming.

Diversification Opportunities for Playa Hotels and Boyd Gaming

PlayaBoydDiversified AwayPlayaBoydDiversified Away100%
0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Playa and Boyd is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Playa Hotels 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 Playa Hotels Resorts 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 Playa Hotels i.e., Playa Hotels and Boyd Gaming go up and down completely randomly.

Pair Corralation between Playa Hotels and Boyd Gaming

Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 1.15 times more return on investment than Boyd Gaming. However, Playa Hotels is 1.15 times more volatile than Boyd Gaming. It trades about 0.18 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.11 per unit of risk. If you would invest  782.00  in Playa Hotels Resorts on September 23, 2024 and sell it today you would earn a total of  179.00  from holding Playa Hotels Resorts or generate 22.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Playa Hotels Resorts  vs.  Boyd Gaming

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0510152025
JavaScript chart by amCharts 3.21.15PLYA BYD
       Timeline  
Playa Hotels Resorts 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Playa Hotels Resorts are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Playa Hotels sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec88.599.51010.5
Boyd Gaming 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 8 (%) 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec6264666870727476

Playa Hotels and Boyd Gaming Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.63-4.22-2.8-1.390.02551.53.034.566.09 0.050.100.15
JavaScript chart by amCharts 3.21.15PLYA BYD
       Returns  

Pair Trading with Playa Hotels and Boyd Gaming

The main advantage of trading using opposite Playa Hotels and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels 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 Playa Hotels Resorts 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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