Correlation Between Boeing and Safe Bulkers

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Can any of the company-specific risk be diversified away by investing in both Boeing and Safe Bulkers 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 Safe Bulkers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Safe Bulkers, you can compare the effects of market volatilities on Boeing and Safe Bulkers 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 Safe Bulkers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Safe Bulkers.

Diversification Opportunities for Boeing and Safe Bulkers

BoeingSafeDiversified AwayBoeingSafeDiversified Away100%
-0.86
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Boeing and Safe is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers 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 Safe Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Bulkers has no effect on the direction of Boeing i.e., Boeing and Safe Bulkers go up and down completely randomly.

Pair Corralation between Boeing and Safe Bulkers

Allowing for the 90-day total investment horizon Boeing is expected to generate 1.73 times less return on investment than Safe Bulkers. But when comparing it to its historical volatility, The Boeing is 1.29 times less risky than Safe Bulkers. It trades about 0.13 of its potential returns per unit of risk. Safe Bulkers is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  339.00  in Safe Bulkers on November 21, 2024 and sell it today you would earn a total of  27.00  from holding Safe Bulkers or generate 7.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

The Boeing  vs.  Safe Bulkers

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15BA SB
       Timeline  
Boeing 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Boeing sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb150160170180
Safe Bulkers 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Safe Bulkers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.43.63.844.24.4

Boeing and Safe Bulkers Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.37-4.02-2.67-1.33-0.02251.422.894.375.847.31 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15BA SB
       Returns  

Pair Trading with Boeing and Safe Bulkers

The main advantage of trading using opposite Boeing and Safe Bulkers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Safe Bulkers 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 Safe Bulkers will offset losses from the drop in Safe Bulkers' long position.
The idea behind The Boeing and Safe Bulkers 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.
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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