Correlation Between Steven Madden and Boyd Gaming

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

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

Diversification Opportunities for Steven Madden and Boyd Gaming

-0.47

Correlation Coefficient

Steven Madden  Boyd Gaming

Very good diversification

The 3 months correlation between Steven and Boyd is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Steven Madden 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 Steven Madden 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 Steven Madden i.e., Steven Madden and Boyd Gaming go up and down completely randomly.

Pair Corralation between Steven Madden and Boyd Gaming

Given the investment horizon of 90 days Steven Madden is expected to under-perform the Boyd Gaming. In addition to that, Steven Madden is 2.26 times more volatile than Boyd Gaming. It trades about -0.04 of its total potential returns per unit of risk. Boyd Gaming is currently generating about 0.11 per unit of volatility. If you would invest  7,414  in Boyd Gaming on September 12, 2024 and sell it today you would earn a total of  150.00  from holding Boyd Gaming or generate 2.02% return on investment over 90 days.

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

Steven Madden  vs.  Boyd Gaming

Steven Madden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Steven Madden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Steven Madden is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Boyd Gaming

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Boyd Gaming exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Steven Madden and Boyd Gaming

The main advantage of trading using opposite Steven Madden and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden 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 Steven Madden 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.