Correlation Between Elbit Systems and Boeing
Can any of the company-specific risk be diversified away by investing in both Elbit Systems 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 Elbit Systems and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and Boeing Co, you can compare the effects of market volatilities on Elbit Systems 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 Elbit Systems with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Boeing.
Diversification Opportunities for Elbit Systems and Boeing
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elbit and Boeing is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Boeing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Elbit Systems 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 Elbit Systems 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 Elbit Systems i.e., Elbit Systems and Boeing go up and down completely randomly.
Pair Corralation between Elbit Systems and Boeing
Given the investment horizon of 90 days Elbit Systems is expected to generate 1.22 times more return on investment than Boeing. However, Elbit Systems is 1.22 times more volatile than Boeing Co. It trades about 0.25 of its potential returns per unit of risk. Boeing Co is currently generating about 0.02 per unit of risk. If you would invest 19,961 in Elbit Systems on August 30, 2024 and sell it today you would earn a total of 4,494 from holding Elbit Systems or generate 22.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 52.27% |
| Values | Daily Returns |
Elbit Systems vs. Boeing Co
Performance |
| Timeline |
| Elbit Systems |
| Boeing |
Elbit Systems and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and Boeing
The main advantage of trading using opposite Elbit Systems and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems 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.| Elbit Systems vs. Mercury Systems | Elbit Systems vs. Triumph Group | Elbit Systems vs. CAE Inc | Elbit Systems vs. AAR Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |