Correlation Between Boeing and Airports
Can any of the company-specific risk be diversified away by investing in both Boeing and Airports 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 Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Airports Of Thailand, you can compare the effects of market volatilities on Boeing and Airports 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 Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Airports.
Diversification Opportunities for Boeing and Airports
Very weak diversification
The 3 months correlation between Boeing and Airports is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Airports Of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports Of Thailand 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 Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports Of Thailand has no effect on the direction of Boeing i.e., Boeing and Airports go up and down completely randomly.
Pair Corralation between Boeing and Airports
If you would invest 200.00 in Airports Of Thailand on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Airports Of Thailand or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
The Boeing vs. Airports Of Thailand
Performance |
| Timeline |
| Boeing |
| Airports Of Thailand |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Boeing and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Airports
The main advantage of trading using opposite Boeing and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.The idea behind The Boeing and Airports Of Thailand 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.| Airports vs. Keurig Dr Pepper | Airports vs. Constellation Brands Class | Airports vs. High Performance Beverages | Airports vs. Monster Beverage Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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