Correlation Between Boeing and Holly Energy
Can any of the company-specific risk be diversified away by investing in both Boeing and Holly Energy 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 Holly Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Holly Energy Partners, you can compare the effects of market volatilities on Boeing and Holly Energy 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 Holly Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Holly Energy.
Diversification Opportunities for Boeing and Holly Energy
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boeing and Holly is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Holly Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holly Energy Partners 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 Holly Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holly Energy Partners has no effect on the direction of Boeing i.e., Boeing and Holly Energy go up and down completely randomly.
Pair Corralation between Boeing and Holly Energy
If you would invest 15,069 in The Boeing on August 28, 2024 and sell it today you would earn a total of 241.00 from holding The Boeing or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
The Boeing vs. Holly Energy Partners
Performance |
| Timeline |
| Boeing |
| Holly Energy Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boeing and Holly Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Holly Energy
The main advantage of trading using opposite Boeing and Holly Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Holly Energy 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 Holly Energy will offset losses from the drop in Holly Energy's long position.The idea behind The Boeing and Holly Energy Partners 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.| Holly Energy vs. MPLX LP | Holly Energy vs. Western Midstream Partners | Holly Energy vs. Plains All American | Holly Energy vs. Genesis Energy LP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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