Correlation Between Tokyu Construction and Boyd Gaming

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

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

Diversification Opportunities for Tokyu Construction and Boyd Gaming

0.72

Correlation Coefficient

Tokyu Construction  Boyd Gaming

Poor diversification

The 3 months correlation between Tokyu and Boyd is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tokyu Construction Co and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming and Tokyu Construction 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 Tokyu Construction Co 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 Tokyu Construction i.e., Tokyu Construction and Boyd Gaming go up and down completely randomly.

Pair Corralation between Tokyu Construction and Boyd Gaming

Assuming the 90 days horizon Tokyu Construction is expected to generate 1.04 times less return on investment than Boyd Gaming. But when comparing it to its historical volatility, Tokyu Construction Co is 1.0 times less risky than Boyd Gaming. It trades about 0.2 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  5,736  in Boyd Gaming on April 20, 2025 and sell it today you would earn a total of  1,314  from holding Boyd Gaming or generate 22.91% return on investment over 90 days.

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

Tokyu Construction Co  vs.  Boyd Gaming

Tokyu Construction

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tokyu Construction Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tokyu Construction 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 uncertain basic indicators, Boyd Gaming unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tokyu Construction and Boyd Gaming

The main advantage of trading using opposite Tokyu Construction and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokyu Construction 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 Tokyu Construction Co 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.