Correlation Between Boeing and First Ottawa
Can any of the company-specific risk be diversified away by investing in both Boeing and First Ottawa 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 First Ottawa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and First Ottawa Bancshares, you can compare the effects of market volatilities on Boeing and First Ottawa 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 First Ottawa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and First Ottawa.
Diversification Opportunities for Boeing and First Ottawa
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boeing and First is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and First Ottawa Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ottawa Bancshares 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 First Ottawa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ottawa Bancshares has no effect on the direction of Boeing i.e., Boeing and First Ottawa go up and down completely randomly.
Pair Corralation between Boeing and First Ottawa
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the First Ottawa. In addition to that, Boeing is 1.75 times more volatile than First Ottawa Bancshares. It trades about -0.05 of its total potential returns per unit of risk. First Ottawa Bancshares is currently generating about 0.11 per unit of volatility. If you would invest 9,910 in First Ottawa Bancshares on September 1, 2024 and sell it today you would earn a total of 2,091 from holding First Ottawa Bancshares or generate 21.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 83.51% |
| Values | Daily Returns |
The Boeing vs. First Ottawa Bancshares
Performance |
| Timeline |
| Boeing |
| First Ottawa Bancshares |
Boeing and First Ottawa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and First Ottawa
The main advantage of trading using opposite Boeing and First Ottawa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, First Ottawa 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 First Ottawa will offset losses from the drop in First Ottawa's long position.| Boeing vs. Raytheon Technologies Corp | Boeing vs. Northrop Grumman | Boeing vs. General Dynamics | Boeing vs. L3Harris Technologies |
| First Ottawa vs. Century Next Financial | First Ottawa vs. Citizens Financial Corp | First Ottawa vs. Triad Business Bank | First Ottawa vs. First Bankers Trustshares |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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