Correlation Between Boeing and Astronics Corp
Can any of the company-specific risk be diversified away by investing in both Boeing and Astronics Corp 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 Astronics Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Astronics Corp Cl, you can compare the effects of market volatilities on Boeing and Astronics Corp 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 Astronics Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Astronics Corp.
Diversification Opportunities for Boeing and Astronics Corp
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boeing and Astronics is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Astronics Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics Corp Cl 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 Astronics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics Corp Cl has no effect on the direction of Boeing i.e., Boeing and Astronics Corp go up and down completely randomly.
Pair Corralation between Boeing and Astronics Corp
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Astronics Corp. But the stock apears to be less risky and, when comparing its historical volatility, The Boeing is 2.42 times less risky than Astronics Corp. The stock trades about -0.01 of its potential returns per unit of risk. The Astronics Corp Cl is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 867.00 in Astronics Corp Cl on August 26, 2024 and sell it today you would earn a total of 848.00 from holding Astronics Corp Cl or generate 97.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 82.7% |
| Values | Daily Returns |
The Boeing vs. Astronics Corp Cl
Performance |
| Timeline |
| Boeing |
| Astronics Corp Cl |
Boeing and Astronics Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Astronics Corp
The main advantage of trading using opposite Boeing and Astronics Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Astronics Corp 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 Astronics Corp will offset losses from the drop in Astronics Corp's long position.The idea behind The Boeing and Astronics Corp Cl 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.| Astronics Corp vs. Firan Technology Group | Astronics Corp vs. 808 Renewable Energy | Astronics Corp vs. Park Electrochemical | Astronics Corp vs. Innovative Solutions and |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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