Correlation Between Boeing and CIRCOR International
Can any of the company-specific risk be diversified away by investing in both Boeing and CIRCOR International 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 CIRCOR International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and CIRCOR International, you can compare the effects of market volatilities on Boeing and CIRCOR International 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 CIRCOR International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and CIRCOR International.
Diversification Opportunities for Boeing and CIRCOR International
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and CIRCOR is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and CIRCOR International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIRCOR International 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 CIRCOR International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIRCOR International has no effect on the direction of Boeing i.e., Boeing and CIRCOR International go up and down completely randomly.
Pair Corralation between Boeing and CIRCOR International
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the CIRCOR International. In addition to that, Boeing is 32.94 times more volatile than CIRCOR International. It trades about -0.03 of its total potential returns per unit of risk. CIRCOR International is currently generating about -0.5 per unit of volatility. If you would invest 5,592 in CIRCOR International on September 12, 2024 and sell it today you would lose (7.00) from holding CIRCOR International or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.14% |
| Values | Daily Returns |
The Boeing vs. CIRCOR International
Performance |
| Timeline |
| Boeing |
| CIRCOR International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boeing and CIRCOR International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and CIRCOR International
The main advantage of trading using opposite Boeing and CIRCOR International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, CIRCOR International 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 CIRCOR International will offset losses from the drop in CIRCOR International's long position.| Boeing vs. Victory Integrity Smallmid Cap | Boeing vs. Hilton Worldwide Holdings | Boeing vs. NVIDIA | Boeing vs. JPMorgan Chase Co |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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