Correlation Between Boeing and Southern Michigan
Can any of the company-specific risk be diversified away by investing in both Boeing and Southern Michigan 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 Southern Michigan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Southern Michigan Bancorp, you can compare the effects of market volatilities on Boeing and Southern Michigan 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 Southern Michigan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Southern Michigan.
Diversification Opportunities for Boeing and Southern Michigan
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boeing and Southern is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Southern Michigan Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Michigan Bancorp 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 Southern Michigan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Michigan Bancorp has no effect on the direction of Boeing i.e., Boeing and Southern Michigan go up and down completely randomly.
Pair Corralation between Boeing and Southern Michigan
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Southern Michigan. In addition to that, Boeing is 1.78 times more volatile than Southern Michigan Bancorp. It trades about -0.05 of its total potential returns per unit of risk. Southern Michigan Bancorp is currently generating about 0.1 per unit of volatility. If you would invest 1,616 in Southern Michigan Bancorp on August 29, 2024 and sell it today you would earn a total of 259.00 from holding Southern Michigan Bancorp or generate 16.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
The Boeing vs. Southern Michigan Bancorp
Performance |
| Timeline |
| Boeing |
| Southern Michigan Bancorp |
Boeing and Southern Michigan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and Southern Michigan
The main advantage of trading using opposite Boeing and Southern Michigan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Southern Michigan 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 Southern Michigan will offset losses from the drop in Southern Michigan's long position.| Boeing vs. ABIVAX Socit Anonyme | Boeing vs. Morningstar Unconstrained Allocation | Boeing vs. SPACE | Boeing vs. Knife River |
| Southern Michigan vs. Invesco High Income | Southern Michigan vs. Blackrock Muniholdings Ny | Southern Michigan vs. Nuveen California Select | Southern Michigan vs. MFS Investment Grade |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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