Correlation Between Boeing and Nexus Real
Can any of the company-specific risk be diversified away by investing in both Boeing and Nexus Real 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 Nexus Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Nexus Real Estate, you can compare the effects of market volatilities on Boeing and Nexus Real 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 Nexus Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Nexus Real.
Diversification Opportunities for Boeing and Nexus Real
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and Nexus is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Nexus Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexus Real Estate 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 Nexus Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexus Real Estate has no effect on the direction of Boeing i.e., Boeing and Nexus Real go up and down completely randomly.
Pair Corralation between Boeing and Nexus Real
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Nexus Real. In addition to that, Boeing is 1.5 times more volatile than Nexus Real Estate. It trades about -0.1 of its total potential returns per unit of risk. Nexus Real Estate is currently generating about -0.04 per unit of volatility. If you would invest 593.00 in Nexus Real Estate on August 25, 2024 and sell it today you would lose (23.00) from holding Nexus Real Estate or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.19% |
| Values | Daily Returns |
The Boeing vs. Nexus Real Estate
Performance |
| Timeline |
| Boeing |
| Nexus Real Estate |
Boeing and Nexus Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Nexus Real
The main advantage of trading using opposite Boeing and Nexus Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Nexus Real 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 Nexus Real will offset losses from the drop in Nexus Real's long position.The idea behind The Boeing and Nexus Real Estate 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.| Nexus Real vs. Smart REIT | Nexus Real vs. Phillips Edison Co | Nexus Real vs. Simon Property Group | Nexus Real vs. Plaza Retail REIT |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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