Correlation Between Boyd Gaming and Bloomin Brands
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Bloomin Brands 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 Boyd Gaming and Bloomin Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Bloomin Brands, you can compare the effects of market volatilities on Boyd Gaming and Bloomin Brands 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 Boyd Gaming with a short position of Bloomin Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Bloomin Brands.
Diversification Opportunities for Boyd Gaming and Bloomin Brands
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boyd and Bloomin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Bloomin Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomin Brands and Boyd Gaming 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 Boyd Gaming are associated (or correlated) with Bloomin Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomin Brands has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Bloomin Brands go up and down completely randomly.
Pair Corralation between Boyd Gaming and Bloomin Brands
Considering the 90-day investment horizon Boyd Gaming is expected to generate 1.32 times more return on investment than Bloomin Brands. However, Boyd Gaming is 1.32 times more volatile than Bloomin Brands. It trades about -0.07 of its potential returns per unit of risk. Bloomin Brands is currently generating about -0.31 per unit of risk. If you would invest 6,183 in Boyd Gaming on March 14, 2024 and sell it today you would lose (739.00) from holding Boyd Gaming or give up 11.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Boyd Gaming vs. Bloomin Brands
Performance |
Timeline |
Boyd Gaming |
Bloomin Brands |
Boyd Gaming and Bloomin Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boyd Gaming and Bloomin Brands
The main advantage of trading using opposite Boyd Gaming and Bloomin Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Bloomin Brands 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 Bloomin Brands will offset losses from the drop in Bloomin Brands' long position.Boyd Gaming vs. MGM Resorts International | Boyd Gaming vs. Las Vegas Sands | Boyd Gaming vs. Wynn Resorts Limited | Boyd Gaming vs. Penn National Gaming |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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