Correlation Between Boeing and Elixinol Global
Can any of the company-specific risk be diversified away by investing in both Boeing and Elixinol Global 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 Elixinol Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Elixinol Global, you can compare the effects of market volatilities on Boeing and Elixinol Global 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 Elixinol Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Elixinol Global.
Diversification Opportunities for Boeing and Elixinol Global
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and Elixinol is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Elixinol Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elixinol Global 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 Elixinol Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elixinol Global has no effect on the direction of Boeing i.e., Boeing and Elixinol Global go up and down completely randomly.
Pair Corralation between Boeing and Elixinol Global
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Elixinol Global. But the stock apears to be less risky and, when comparing its historical volatility, The Boeing is 32.77 times less risky than Elixinol Global. The stock trades about -0.03 of its potential returns per unit of risk. The Elixinol Global is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1.36 in Elixinol Global on August 28, 2024 and sell it today you would lose (1.04) from holding Elixinol Global or give up 76.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
The Boeing vs. Elixinol Global
Performance |
| Timeline |
| Boeing |
| Elixinol Global |
Boeing and Elixinol Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Elixinol Global
The main advantage of trading using opposite Boeing and Elixinol Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Elixinol Global 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 Elixinol Global will offset losses from the drop in Elixinol Global's long position.The idea behind The Boeing and Elixinol Global 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.| Elixinol Global vs. Pharmadrug | Elixinol Global vs. Livewire Ergogenics | Elixinol Global vs. Agra Ventures | Elixinol Global vs. BellRock Brands |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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