Correlation Between Boeing and Sembcorp Marine
Can any of the company-specific risk be diversified away by investing in both Boeing and Sembcorp Marine 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 Sembcorp Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Sembcorp Marine, you can compare the effects of market volatilities on Boeing and Sembcorp Marine 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 Sembcorp Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Sembcorp Marine.
Diversification Opportunities for Boeing and Sembcorp Marine
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boeing and Sembcorp is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Sembcorp Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sembcorp Marine 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 Sembcorp Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sembcorp Marine has no effect on the direction of Boeing i.e., Boeing and Sembcorp Marine go up and down completely randomly.
Pair Corralation between Boeing and Sembcorp Marine
Allowing for the 90-day total investment horizon The Boeing is expected to generate 0.36 times more return on investment than Sembcorp Marine. However, The Boeing is 2.74 times less risky than Sembcorp Marine. It trades about 0.1 of its potential returns per unit of risk. Sembcorp Marine is currently generating about -0.01 per unit of risk. If you would invest 14,931 in The Boeing on September 1, 2024 and sell it today you would earn a total of 613.00 from holding The Boeing or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Boeing vs. Sembcorp Marine
Performance |
| Timeline |
| Boeing |
| Sembcorp Marine |
Boeing and Sembcorp Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Sembcorp Marine
The main advantage of trading using opposite Boeing and Sembcorp Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Sembcorp Marine 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 Sembcorp Marine will offset losses from the drop in Sembcorp Marine's long position.| Boeing vs. Raytheon Technologies Corp | Boeing vs. Northrop Grumman | Boeing vs. General Dynamics | Boeing vs. L3Harris Technologies |
| Sembcorp Marine vs. Austal Limited | Sembcorp Marine vs. Rolls Royce Holdings PLC | Sembcorp Marine vs. AAR Corp | Sembcorp Marine vs. Eve Holding |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Transaction History View history of all your transactions and understand their impact on performance |