Correlation Between Boeing and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both Boeing and Eagle Financial 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 Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Eagle Financial Services, you can compare the effects of market volatilities on Boeing and Eagle Financial 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 Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Eagle Financial.
Diversification Opportunities for Boeing and Eagle Financial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and Eagle is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services 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 Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Services has no effect on the direction of Boeing i.e., Boeing and Eagle Financial go up and down completely randomly.
Pair Corralation between Boeing and Eagle Financial
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Eagle Financial. In addition to that, Boeing is 1.45 times more volatile than Eagle Financial Services. It trades about -0.05 of its total potential returns per unit of risk. Eagle Financial Services is currently generating about 0.09 per unit of volatility. If you would invest 2,914 in Eagle Financial Services on September 1, 2024 and sell it today you would earn a total of 636.00 from holding Eagle Financial Services or generate 21.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.83% |
| Values | Daily Returns |
The Boeing vs. Eagle Financial Services
Performance |
| Timeline |
| Boeing |
| Eagle Financial Services |
Boeing and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Eagle Financial
The main advantage of trading using opposite Boeing and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Eagle Financial 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 Eagle Financial will offset losses from the drop in Eagle Financial's long position.| Boeing vs. Raytheon Technologies Corp | Boeing vs. Northrop Grumman | Boeing vs. General Dynamics | Boeing vs. L3Harris Technologies |
| Eagle Financial vs. Chesapeake Finl Shs | Eagle Financial vs. Taylor Calvin B | Eagle Financial vs. PSB Holdings | Eagle Financial vs. Farmers Merchants Bancorp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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