Correlation Between Boeing and China Everbright
Can any of the company-specific risk be diversified away by investing in both Boeing and China Everbright 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 China Everbright into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and China Everbright Limited, you can compare the effects of market volatilities on Boeing and China Everbright 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 China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and China Everbright.
Diversification Opportunities for Boeing and China Everbright
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and China is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and China Everbright Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright 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 China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright has no effect on the direction of Boeing i.e., Boeing and China Everbright go up and down completely randomly.
Pair Corralation between Boeing and China Everbright
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the China Everbright. But the stock apears to be less risky and, when comparing its historical volatility, The Boeing is 1.92 times less risky than China Everbright. The stock trades about -0.07 of its potential returns per unit of risk. The China Everbright Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 51.00 in China Everbright Limited on September 3, 2024 and sell it today you would earn a total of 17.00 from holding China Everbright Limited or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 62.28% |
| Values | Daily Returns |
The Boeing vs. China Everbright Limited
Performance |
| Timeline |
| Boeing |
| China Everbright |
Boeing and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and China Everbright
The main advantage of trading using opposite Boeing and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.| Boeing vs. Highway Holdings Limited | Boeing vs. QCR Holdings | Boeing vs. Partner Communications | Boeing vs. Acumen Pharmaceuticals |
| China Everbright vs. KKR Co LP | China Everbright vs. Apollo Global Management | China Everbright vs. TPG Inc | China Everbright vs. Blackstone Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets |