Correlation Between OneSpaWorld Holdings and Boyd Gaming

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

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

Diversification Opportunities for OneSpaWorld Holdings and Boyd Gaming

-0.82

Correlation Coefficient

OneSpaWorld Holdings  Boyd Gaming

Pay attention - limited upside

The 3 months correlation between OneSpaWorld and Boyd is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding OneSpaWorld Holdings and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and OneSpaWorld Holdings 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 OneSpaWorld Holdings 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 OneSpaWorld Holdings i.e., OneSpaWorld Holdings and Boyd Gaming go up and down completely randomly.

Pair Corralation between OneSpaWorld Holdings and Boyd Gaming

Considering the 90-day investment horizon OneSpaWorld Holdings is expected to generate 0.89 times more return on investment than Boyd Gaming. However, OneSpaWorld Holdings is 1.12 times less risky than Boyd Gaming. It trades about 0.17 of its potential returns per unit of risk. Boyd Gaming is currently generating about -0.17 per unit of risk. If you would invest  1,286  in OneSpaWorld Holdings on March 13, 2024 and sell it today you would earn a total of  229.00  from holding OneSpaWorld Holdings or generate 17.81% return on investment over 90 days.

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

OneSpaWorld Holdings  vs.  Boyd Gaming

OneSpaWorld Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpaWorld Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, OneSpaWorld Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Boyd Gaming

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with OneSpaWorld Holdings and Boyd Gaming

The main advantage of trading using opposite OneSpaWorld Holdings and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSpaWorld Holdings 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 OneSpaWorld Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.