Correlation Between Boeing and Prospector Capital
Can any of the company-specific risk be diversified away by investing in both Boeing and Prospector Capital 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 Prospector Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Prospector Capital Corp, you can compare the effects of market volatilities on Boeing and Prospector Capital 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 Prospector Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Prospector Capital.
Diversification Opportunities for Boeing and Prospector Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boeing and Prospector is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Prospector Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospector Capital Corp 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 Prospector Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospector Capital Corp has no effect on the direction of Boeing i.e., Boeing and Prospector Capital go up and down completely randomly.
Pair Corralation between Boeing and Prospector Capital
If you would invest (100.00) in Prospector Capital Corp on November 27, 2024 and sell it today you would earn a total of 100.00 from holding Prospector Capital Corp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
The Boeing vs. Prospector Capital Corp
Performance |
| Timeline |
| Boeing |
| Prospector Capital Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Boeing and Prospector Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Prospector Capital
The main advantage of trading using opposite Boeing and Prospector Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Prospector Capital 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 Prospector Capital will offset losses from the drop in Prospector Capital's long position.The idea behind The Boeing and Prospector Capital Corp 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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