Correlation Between Boyd Gaming and Sun Country
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and Sun Country 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 Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and Sun Country Airlines, you can compare the effects of market volatilities on Boyd Gaming and Sun Country 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 Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and Sun Country.
Diversification Opportunities for Boyd Gaming and Sun Country
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boyd and Sun is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and Sun Country Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Country Airlines 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 Sun Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Country Airlines has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and Sun Country go up and down completely randomly.
Pair Corralation between Boyd Gaming and Sun Country
Considering the 90-day investment horizon Boyd Gaming is expected to generate 0.98 times more return on investment than Sun Country. However, Boyd Gaming is 1.02 times less risky than Sun Country. It trades about -0.19 of its potential returns per unit of risk. Sun Country Airlines is currently generating about -0.27 per unit of risk. If you would invest 6,456 in Boyd Gaming on February 15, 2024 and sell it today you would lose (958.00) from holding Boyd Gaming or give up 14.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Boyd Gaming vs. Sun Country Airlines
Performance |
Timeline |
Boyd Gaming |
Sun Country Airlines |
Boyd Gaming and Sun Country Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boyd Gaming and Sun Country
The main advantage of trading using opposite Boyd Gaming and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, Sun Country 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 Sun Country will offset losses from the drop in Sun Country's long position.Boyd Gaming vs. Revelation Biosciences | Boyd Gaming vs. SHF Holdings | Boyd Gaming vs. HUMANA INC | Boyd Gaming vs. Aquagold International |
Sun Country vs. Spirit Airlines | Sun Country vs. JetBlue Airways Corp | Sun Country vs. Hawaiian Holdings | Sun Country vs. Allegiant Travel |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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