Correlation Between Boeing and US Metro
Can any of the company-specific risk be diversified away by investing in both Boeing and US Metro 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 US Metro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and US Metro Bancorp, you can compare the effects of market volatilities on Boeing and US Metro 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 US Metro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and US Metro.
Diversification Opportunities for Boeing and US Metro
Excellent diversification
The 3 months correlation between Boeing and USMT is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and US Metro Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Metro 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 US Metro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Metro Bancorp has no effect on the direction of Boeing i.e., Boeing and US Metro go up and down completely randomly.
Pair Corralation between Boeing and US Metro
If you would invest 385.00 in US Metro Bancorp on August 28, 2024 and sell it today you would earn a total of 0.00 from holding US Metro Bancorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 12.5% |
| Values | Daily Returns |
The Boeing vs. US Metro Bancorp
Performance |
| Timeline |
| Boeing |
| US Metro Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boeing and US Metro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and US Metro
The main advantage of trading using opposite Boeing and US Metro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, US Metro 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 US Metro will offset losses from the drop in US Metro's long position.The idea behind The Boeing and US Metro Bancorp 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.| US Metro vs. CMUV Bancorp | US Metro vs. Pioneer Bankcorp | US Metro vs. Summit Bancshares | US Metro vs. Liberty Northwest Bancorp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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