Correlation Between Boeing and KraneShares Asia
Can any of the company-specific risk be diversified away by investing in both Boeing and KraneShares Asia 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 KraneShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and KraneShares Asia Pacific, you can compare the effects of market volatilities on Boeing and KraneShares Asia 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 KraneShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and KraneShares Asia.
Diversification Opportunities for Boeing and KraneShares Asia
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and KraneShares is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and KraneShares Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Asia Pacific 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 KraneShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Asia Pacific has no effect on the direction of Boeing i.e., Boeing and KraneShares Asia go up and down completely randomly.
Pair Corralation between Boeing and KraneShares Asia
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the KraneShares Asia. In addition to that, Boeing is 8.4 times more volatile than KraneShares Asia Pacific. It trades about -0.03 of its total potential returns per unit of risk. KraneShares Asia Pacific is currently generating about 0.19 per unit of volatility. If you would invest 2,119 in KraneShares Asia Pacific on September 12, 2024 and sell it today you would earn a total of 369.00 from holding KraneShares Asia Pacific or generate 17.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boeing vs. KraneShares Asia Pacific
Performance |
| Timeline |
| Boeing |
| KraneShares Asia Pacific |
Boeing and KraneShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and KraneShares Asia
The main advantage of trading using opposite Boeing and KraneShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, KraneShares Asia 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 KraneShares Asia will offset losses from the drop in KraneShares Asia's long position.| Boeing vs. Victory Integrity Smallmid Cap | Boeing vs. Hilton Worldwide Holdings | Boeing vs. NVIDIA | Boeing vs. JPMorgan Chase Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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