Correlation Between Boeing and Lichen China
Can any of the company-specific risk be diversified away by investing in both Boeing and Lichen China 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 Lichen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Lichen China Limited, you can compare the effects of market volatilities on Boeing and Lichen China 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 Lichen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Lichen China.
Diversification Opportunities for Boeing and Lichen China
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boeing and Lichen is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Lichen China Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lichen China Limited 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 Lichen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lichen China Limited has no effect on the direction of Boeing i.e., Boeing and Lichen China go up and down completely randomly.
Pair Corralation between Boeing and Lichen China
Allowing for the 90-day total investment horizon The Boeing is expected to generate 0.18 times more return on investment than Lichen China. However, The Boeing is 5.42 times less risky than Lichen China. It trades about 0.22 of its potential returns per unit of risk. Lichen China Limited is currently generating about -0.36 per unit of risk. If you would invest 17,176 in The Boeing on November 9, 2024 and sell it today you would earn a total of 1,304 from holding The Boeing or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boeing vs. Lichen China Limited
Performance |
| Timeline |
| Boeing |
| Lichen China Limited |
Boeing and Lichen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Lichen China
The main advantage of trading using opposite Boeing and Lichen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Lichen China 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 Lichen China will offset losses from the drop in Lichen China's long position.| Boeing vs. Great Western Minerals | Boeing vs. Enterprise Bancorp | Boeing vs. T Rowe Price | Boeing vs. Aviat Networks |
| Lichen China vs. First Advantage Corp | Lichen China vs. Discount Print USA | Lichen China vs. Cass Information Systems | Lichen China vs. Civeo Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |