Correlation Between Penn National and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Penn National 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 Penn National and Boyd Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penn National Gaming and Boyd Gaming, you can compare the effects of market volatilities on Penn National 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 Penn National with a short position of Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Boyd Gaming.
Diversification Opportunities for Penn National and Boyd Gaming
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Penn and Boyd is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Penn National 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 Penn National Gaming 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 Penn National i.e., Penn National and Boyd Gaming go up and down completely randomly.
Pair Corralation between Penn National and Boyd Gaming
Given the investment horizon of 90 days Penn National Gaming is expected to under-perform the Boyd Gaming. In addition to that, Penn National is 1.77 times more volatile than Boyd Gaming. It trades about -0.18 of its total potential returns per unit of risk. Boyd Gaming is currently generating about -0.04 per unit of volatility. If you would invest 6,372 in Boyd Gaming on January 20, 2024 and sell it today you would lose (79.00) from holding Boyd Gaming or give up 1.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Penn National Gaming vs. Boyd Gaming
Performance |
Timeline |
Penn National Gaming |
Boyd Gaming |
Penn National and Boyd Gaming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penn National and Boyd Gaming
The main advantage of trading using opposite Penn National and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National 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.Penn National vs. DraftKings | Penn National vs. MGM Resorts International | Penn National vs. Caesars Entertainment | Penn National vs. Boyd 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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