Correlation Between CPI Aerostructures and Boeing
Can any of the company-specific risk be diversified away by investing in both CPI Aerostructures and Boeing 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 CPI Aerostructures and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPI Aerostructures and The Boeing, you can compare the effects of market volatilities on CPI Aerostructures and Boeing 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 CPI Aerostructures with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Aerostructures and Boeing.
Diversification Opportunities for CPI Aerostructures and Boeing
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CPI and Boeing is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding CPI Aerostructures and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and CPI Aerostructures 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 CPI Aerostructures are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of CPI Aerostructures i.e., CPI Aerostructures and Boeing go up and down completely randomly.
Pair Corralation between CPI Aerostructures and Boeing
Considering the 90-day investment horizon CPI Aerostructures is expected to generate 2.99 times more return on investment than Boeing. However, CPI Aerostructures is 2.99 times more volatile than The Boeing. It trades about -0.02 of its potential returns per unit of risk. The Boeing is currently generating about -0.06 per unit of risk. If you would invest 235.00 in CPI Aerostructures on August 23, 2024 and sell it today you would lose (95.00) from holding CPI Aerostructures or give up 40.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
CPI Aerostructures vs. The Boeing
Performance |
| Timeline |
| CPI Aerostructures |
| Boeing |
CPI Aerostructures and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPI Aerostructures and Boeing
The main advantage of trading using opposite CPI Aerostructures and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPI Aerostructures position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.| CPI Aerostructures vs. Small Cap Core | CPI Aerostructures vs. Freedom Holding Corp | CPI Aerostructures vs. Gfl Environmental Holdings | CPI Aerostructures vs. Growth Fund Of |
| Boeing vs. Small Cap Core | Boeing vs. Freedom Holding Corp | Boeing vs. Gfl Environmental Holdings | Boeing vs. Growth Fund Of |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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