Correlation Between Boeing and Interlink Electronics
Can any of the company-specific risk be diversified away by investing in both Boeing and Interlink Electronics 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 Interlink Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Interlink Electronics, you can compare the effects of market volatilities on Boeing and Interlink Electronics 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 Interlink Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Interlink Electronics.
Diversification Opportunities for Boeing and Interlink Electronics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boeing and Interlink is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Interlink Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Electronics 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 Interlink Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlink Electronics has no effect on the direction of Boeing i.e., Boeing and Interlink Electronics go up and down completely randomly.
Pair Corralation between Boeing and Interlink Electronics
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Interlink Electronics. But the stock apears to be less risky and, when comparing its historical volatility, The Boeing is 3.18 times less risky than Interlink Electronics. The stock trades about -0.03 of its potential returns per unit of risk. The Interlink Electronics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 397.00 in Interlink Electronics on August 31, 2024 and sell it today you would earn a total of 85.00 from holding Interlink Electronics or generate 21.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boeing vs. Interlink Electronics
Performance |
| Timeline |
| Boeing |
| Interlink Electronics |
Boeing and Interlink Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Interlink Electronics
The main advantage of trading using opposite Boeing and Interlink Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Interlink Electronics 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 Interlink Electronics will offset losses from the drop in Interlink Electronics' long position.| Boeing vs. Raytheon Technologies Corp | Boeing vs. Northrop Grumman | Boeing vs. General Dynamics | Boeing vs. L3Harris Technologies |
| Interlink Electronics vs. Methode Electronics | Interlink Electronics vs. Bel Fuse A | Interlink Electronics vs. CTS Corporation | Interlink Electronics vs. MicroCloud Hologram |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stocks Directory Find actively traded stocks across global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets |