Correlation Between Boeing and Emerging Europe
Can any of the company-specific risk be diversified away by investing in both Boeing and Emerging Europe 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 Emerging Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Emerging Europe Fund, you can compare the effects of market volatilities on Boeing and Emerging Europe 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 Emerging Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Emerging Europe.
Diversification Opportunities for Boeing and Emerging Europe
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boeing and Emerging is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Emerging Europe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Europe 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 Emerging Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Europe has no effect on the direction of Boeing i.e., Boeing and Emerging Europe go up and down completely randomly.
Pair Corralation between Boeing and Emerging Europe
If you would invest 15,298 in The Boeing on August 30, 2024 and sell it today you would lose (58.00) from holding The Boeing or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
The Boeing vs. Emerging Europe Fund
Performance |
| Timeline |
| Boeing |
| Emerging Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boeing and Emerging Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Emerging Europe
The main advantage of trading using opposite Boeing and Emerging Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Emerging Europe 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 Emerging Europe will offset losses from the drop in Emerging Europe's long position.The idea behind The Boeing and Emerging Europe Fund 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.| Emerging Europe vs. Tekla Healthcare Opportunities | Emerging Europe vs. Health Biotchnology Portfolio | Emerging Europe vs. Alphacentric Lifesci Healthcare | Emerging Europe vs. Deutsche Health And |
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 Stocks Directory module to find actively traded stocks across global markets.
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