Correlation Between Boeing and MEI Pharma
Can any of the company-specific risk be diversified away by investing in both Boeing and MEI Pharma 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 MEI Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and MEI Pharma, you can compare the effects of market volatilities on Boeing and MEI Pharma 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 MEI Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and MEI Pharma.
Diversification Opportunities for Boeing and MEI Pharma
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boeing and MEI is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and MEI Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEI Pharma 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 MEI Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEI Pharma has no effect on the direction of Boeing i.e., Boeing and MEI Pharma go up and down completely randomly.
Pair Corralation between Boeing and MEI Pharma
Allowing for the 90-day total investment horizon Boeing is expected to generate 4.17 times less return on investment than MEI Pharma. But when comparing it to its historical volatility, The Boeing is 1.31 times less risky than MEI Pharma. It trades about 0.09 of its potential returns per unit of risk. MEI Pharma is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 255.00 in MEI Pharma on November 3, 2024 and sell it today you would earn a total of 30.00 from holding MEI Pharma or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Boeing vs. MEI Pharma
Performance |
| Timeline |
| Boeing |
| MEI Pharma |
Boeing and MEI Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and MEI Pharma
The main advantage of trading using opposite Boeing and MEI Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, MEI Pharma 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 MEI Pharma will offset losses from the drop in MEI Pharma's long position.| Boeing vs. General Dynamics | Boeing vs. Rocket Lab USA | Boeing vs. SCOR PK | Boeing vs. Aquagold International |
| MEI Pharma vs. Kezar Life Sciences | MEI Pharma vs. Vincerx Pharma | MEI Pharma vs. Avenue Therapeutics | MEI Pharma vs. Assembly Biosciences |
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.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |