Correlation Between Boeing and Flow Capital
Can any of the company-specific risk be diversified away by investing in both Boeing and Flow Capital 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 Boeing and Flow Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Flow Capital Corp, you can compare the effects of market volatilities on Boeing and Flow Capital 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 Boeing with a short position of Flow Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Flow Capital.
Diversification Opportunities for Boeing and Flow Capital
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boeing and Flow is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Flow Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Capital Corp and Boeing 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 The Boeing are associated (or correlated) with Flow Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Capital Corp has no effect on the direction of Boeing i.e., Boeing and Flow Capital go up and down completely randomly.
Pair Corralation between Boeing and Flow Capital
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Flow Capital. But the stock apears to be less risky and, when comparing its historical volatility, The Boeing is 1.61 times less risky than Flow Capital. The stock trades about -0.01 of its potential returns per unit of risk. The Flow Capital Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Flow Capital Corp on August 27, 2024 and sell it today you would earn a total of 26.00 from holding Flow Capital Corp or generate 74.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 59.68% |
| Values | Daily Returns |
The Boeing vs. Flow Capital Corp
Performance |
| Timeline |
| Boeing |
| Flow Capital Corp |
Boeing and Flow Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Flow Capital
The main advantage of trading using opposite Boeing and Flow Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Flow Capital 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 Flow Capital will offset losses from the drop in Flow Capital's long position.The idea behind The Boeing and Flow Capital Corp 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.| Flow Capital vs. Invesco High Income | Flow Capital vs. Blackrock Muniholdings Ny | Flow Capital vs. MFS Investment Grade | Flow Capital vs. Federated Premier Municipal |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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