Correlation Between Boeing and Blue Whale

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Can any of the company-specific risk be diversified away by investing in both Boeing and Blue Whale 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 Blue Whale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Blue Whale Acquisition, you can compare the effects of market volatilities on Boeing and Blue Whale 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 Blue Whale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Blue Whale.

Diversification Opportunities for Boeing and Blue Whale

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Boeing and Blue is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Blue Whale Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Whale Acquisition 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 Blue Whale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Whale Acquisition has no effect on the direction of Boeing i.e., Boeing and Blue Whale go up and down completely randomly.

Pair Corralation between Boeing and Blue Whale

If you would invest  14,517  in The Boeing on September 13, 2024 and sell it today you would earn a total of  2,079  from holding The Boeing or generate 14.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

The Boeing  vs.  Blue Whale Acquisition

 Performance 
       Timeline  
Boeing 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Boeing may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Blue Whale Acquisition 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Blue Whale Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Blue Whale is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Boeing and Blue Whale Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Boeing and Blue Whale

The main advantage of trading using opposite Boeing and Blue Whale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Blue Whale 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 Blue Whale will offset losses from the drop in Blue Whale's long position.
The idea behind The Boeing and Blue Whale Acquisition 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.
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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