Correlation Between Applied Materials and Boyd Gaming

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

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

Diversification Opportunities for Applied Materials and Boyd Gaming

0.93

Correlation Coefficient

Applied Materials  Boyd Gaming

Almost no diversification

The 3 months correlation between Applied and Boyd is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Applied Materials 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 Applied Materials 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 Applied Materials i.e., Applied Materials and Boyd Gaming go up and down completely randomly.

Pair Corralation between Applied Materials and Boyd Gaming

Assuming the 90 days horizon Applied Materials is expected to generate 1.58 times more return on investment than Boyd Gaming. However, Applied Materials is 1.58 times more volatile than Boyd Gaming. It trades about 0.22 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.21 per unit of risk. If you would invest  11,827  in Applied Materials on April 21, 2025 and sell it today you would earn a total of  4,731  from holding Applied Materials or generate 40.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Applied Materials  vs.  Boyd Gaming

Applied Materials

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Applied Materials reported solid returns over the last few months and may actually be approaching a breakup point.

Boyd Gaming

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Gaming are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Boyd Gaming unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Applied Materials and Boyd Gaming

The main advantage of trading using opposite Applied Materials and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials 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 Applied Materials 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..