Correlation Between Boeing and Lifex Inflation-protec
Can any of the company-specific risk be diversified away by investing in both Boeing and Lifex Inflation-protec 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 Lifex Inflation-protec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Lifex Inflation Protected Income, you can compare the effects of market volatilities on Boeing and Lifex Inflation-protec 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 Lifex Inflation-protec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Lifex Inflation-protec.
Diversification Opportunities for Boeing and Lifex Inflation-protec
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and Lifex is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Lifex Inflation Protected Inco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Inflation-protec 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 Lifex Inflation-protec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Inflation-protec has no effect on the direction of Boeing i.e., Boeing and Lifex Inflation-protec go up and down completely randomly.
Pair Corralation between Boeing and Lifex Inflation-protec
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Lifex Inflation-protec. In addition to that, Boeing is 4.78 times more volatile than Lifex Inflation Protected Income. It trades about -0.04 of its total potential returns per unit of risk. Lifex Inflation Protected Income is currently generating about 0.02 per unit of volatility. If you would invest 1,792 in Lifex Inflation Protected Income on September 2, 2024 and sell it today you would earn a total of 17.00 from holding Lifex Inflation Protected Income or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.45% |
| Values | Daily Returns |
The Boeing vs. Lifex Inflation Protected Inco
Performance |
| Timeline |
| Boeing |
| Lifex Inflation-protec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boeing and Lifex Inflation-protec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Lifex Inflation-protec
The main advantage of trading using opposite Boeing and Lifex Inflation-protec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Lifex Inflation-protec 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 Lifex Inflation-protec will offset losses from the drop in Lifex Inflation-protec's long position.The idea behind The Boeing and Lifex Inflation Protected Income 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.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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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