Correlation Between Boeing and Ehang Holdings
Can any of the company-specific risk be diversified away by investing in both Boeing and Ehang Holdings 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 Ehang Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Ehang Holdings, you can compare the effects of market volatilities on Boeing and Ehang Holdings 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 Ehang Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Ehang Holdings.
Diversification Opportunities for Boeing and Ehang Holdings
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and Ehang is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Ehang Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ehang Holdings 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 Ehang Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ehang Holdings has no effect on the direction of Boeing i.e., Boeing and Ehang Holdings go up and down completely randomly.
Pair Corralation between Boeing and Ehang Holdings
Allowing for the 90-day total investment horizon Boeing is expected to generate 14.38 times less return on investment than Ehang Holdings. But when comparing it to its historical volatility, The Boeing is 3.47 times less risky than Ehang Holdings. It trades about 0.01 of its potential returns per unit of risk. Ehang Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,414 in Ehang Holdings on August 30, 2024 and sell it today you would earn a total of 85.00 from holding Ehang Holdings or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boeing vs. Ehang Holdings
Performance |
| Timeline |
| Boeing |
| Ehang Holdings |
Boeing and Ehang Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Ehang Holdings
The main advantage of trading using opposite Boeing and Ehang Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Ehang Holdings 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 Ehang Holdings will offset losses from the drop in Ehang Holdings' long position.The idea behind The Boeing and Ehang Holdings 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.| Ehang Holdings vs. Archer Aviation | Ehang Holdings vs. Vertical Aerospace | Ehang Holdings vs. Rocket Lab USA | Ehang Holdings vs. Lilium NV |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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