Correlation Between Advanced Micro and BOEING CDR
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and BOEING CDR 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 Advanced Micro and BOEING CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and BOEING CDR, you can compare the effects of market volatilities on Advanced Micro and BOEING CDR 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 Advanced Micro with a short position of BOEING CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and BOEING CDR.
Diversification Opportunities for Advanced Micro and BOEING CDR
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Advanced and BOEING is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and BOEING CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOEING CDR and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with BOEING CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOEING CDR has no effect on the direction of Advanced Micro i.e., Advanced Micro and BOEING CDR go up and down completely randomly.
Pair Corralation between Advanced Micro and BOEING CDR
Assuming the 90 days trading horizon Advanced Micro Devices is expected to generate 1.44 times more return on investment than BOEING CDR. However, Advanced Micro is 1.44 times more volatile than BOEING CDR. It trades about 0.03 of its potential returns per unit of risk. BOEING CDR is currently generating about -0.04 per unit of risk. If you would invest 2,295 in Advanced Micro Devices on August 27, 2024 and sell it today you would earn a total of 331.00 from holding Advanced Micro Devices or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. BOEING CDR
Performance |
| Timeline |
| Advanced Micro Devices |
| BOEING CDR |
Advanced Micro and BOEING CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and BOEING CDR
The main advantage of trading using opposite Advanced Micro and BOEING CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, BOEING CDR 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 BOEING CDR will offset losses from the drop in BOEING CDR's long position.| Advanced Micro vs. Bausch Health Companies | Advanced Micro vs. Birchtech Corp | Advanced Micro vs. Leveljump Healthcare Corp | Advanced Micro vs. Jamieson Wellness |
| BOEING CDR vs. Boat Rocker Media | BOEING CDR vs. Verizon Communications CDR | BOEING CDR vs. Maple Leaf Foods | BOEING CDR vs. Rubicon Organics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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