Correlation Between Boeing and First American
Can any of the company-specific risk be diversified away by investing in both Boeing and First American 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 American 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 American Funds, you can compare the effects of market volatilities on Boeing and First American 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 American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and First American.
Diversification Opportunities for Boeing and First American
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and First is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and First American Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First American Funds 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 American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First American Funds has no effect on the direction of Boeing i.e., Boeing and First American go up and down completely randomly.
Pair Corralation between Boeing and First American
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the First American. In addition to that, Boeing is 14.23 times more volatile than First American Funds. It trades about -0.03 of its total potential returns per unit of risk. First American Funds is currently generating about 0.14 per unit of volatility. If you would invest 93.00 in First American Funds on September 1, 2024 and sell it today you would earn a total of 7.00 from holding First American Funds or generate 7.53% 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. First American Funds
Performance |
| Timeline |
| Boeing |
| First American Funds |
Boeing and First American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and First American
The main advantage of trading using opposite Boeing and First American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, First American 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 American will offset losses from the drop in First American's long position.| Boeing vs. Raytheon Technologies Corp | Boeing vs. Northrop Grumman | Boeing vs. General Dynamics | Boeing vs. L3Harris Technologies |
| First American vs. Barings Emerging Markets | First American vs. Sp Midcap Index | First American vs. Goldman Sachs Emerging | First American vs. Vanguard Developed Markets |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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