Correlation Between Boyd Gaming and Chesapeake Energy
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Chesapeake Energy 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 Chesapeake Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Chesapeake Energy, you can compare the effects of market volatilities on Boyd Gaming and Chesapeake Energy 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 Chesapeake Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Chesapeake Energy.
Diversification Opportunities for Boyd Gaming and Chesapeake Energy
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boyd and Chesapeake is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Chesapeake Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Energy 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 Chesapeake Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Energy has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Chesapeake Energy go up and down completely randomly.
Pair Corralation between Boyd Gaming and Chesapeake Energy
Considering the 90-day investment horizon Boyd Gaming is expected to generate 1.57 times more return on investment than Chesapeake Energy. However, Boyd Gaming is 1.57 times more volatile than Chesapeake Energy. It trades about -0.06 of its potential returns per unit of risk. Chesapeake Energy is currently generating about -0.52 per unit of risk. If you would invest 5,490 in Boyd Gaming on March 19, 2024 and sell it today you would lose (123.00) from holding Boyd Gaming or give up 2.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Boyd Gaming vs. Chesapeake Energy
Performance |
Timeline |
Boyd Gaming |
Chesapeake Energy |
Boyd Gaming and Chesapeake Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boyd Gaming and Chesapeake Energy
The main advantage of trading using opposite Boyd Gaming and Chesapeake Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Chesapeake Energy 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 Chesapeake Energy will offset losses from the drop in Chesapeake Energy's long position.Boyd Gaming vs. Golden Entertainment | Boyd Gaming vs. Red Rock Resorts | Boyd Gaming vs. Century Casinos | Boyd Gaming vs. Hilton Grand Vacations |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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