Correlation Between Boeing and IShares JPX
Can any of the company-specific risk be diversified away by investing in both Boeing and IShares JPX 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 IShares JPX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and iShares JPX Nikkei 400, you can compare the effects of market volatilities on Boeing and IShares JPX 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 IShares JPX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and IShares JPX.
Diversification Opportunities for Boeing and IShares JPX
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and IShares is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and iShares JPX Nikkei 400 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JPX Nikkei 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 IShares JPX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JPX Nikkei has no effect on the direction of Boeing i.e., Boeing and IShares JPX go up and down completely randomly.
Pair Corralation between Boeing and IShares JPX
Allowing for the 90-day total investment horizon Boeing is expected to generate 1.15 times less return on investment than IShares JPX. In addition to that, Boeing is 1.73 times more volatile than iShares JPX Nikkei 400. It trades about 0.09 of its total potential returns per unit of risk. iShares JPX Nikkei 400 is currently generating about 0.18 per unit of volatility. If you would invest 7,071 in iShares JPX Nikkei 400 on November 3, 2024 and sell it today you would earn a total of 224.00 from holding iShares JPX Nikkei 400 or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Boeing vs. iShares JPX Nikkei 400
Performance |
| Timeline |
| Boeing |
| iShares JPX Nikkei |
Boeing and IShares JPX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and IShares JPX
The main advantage of trading using opposite Boeing and IShares JPX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, IShares JPX 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 IShares JPX will offset losses from the drop in IShares JPX's long position.The idea behind The Boeing and iShares JPX Nikkei 400 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.| IShares JPX vs. iShares MSCI Japan | IShares JPX vs. iShares Currency Hedged | IShares JPX vs. iShares MSCI United |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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