Correlation Between Plastic Omnium and Boeing
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium 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 Plastic Omnium and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and The Boeing, you can compare the effects of market volatilities on Plastic Omnium 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 Plastic Omnium with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and Boeing.
Diversification Opportunities for Plastic Omnium and Boeing
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Plastic and Boeing is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium i.e., Plastic Omnium and Boeing go up and down completely randomly.
Pair Corralation between Plastic Omnium and Boeing
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 1.16 times more return on investment than Boeing. However, Plastic Omnium is 1.16 times more volatile than The Boeing. It trades about -0.04 of its potential returns per unit of risk. The Boeing is currently generating about -0.06 per unit of risk. If you would invest 1,146 in Plastic Omnium on September 3, 2024 and sell it today you would lose (291.00) from holding Plastic Omnium or give up 25.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. The Boeing
Performance |
| Timeline |
| Plastic Omnium |
| Boeing |
Plastic Omnium and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and Boeing
The main advantage of trading using opposite Plastic Omnium and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium 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.| Plastic Omnium vs. Apple Inc | Plastic Omnium vs. Apple Inc | Plastic Omnium vs. Apple Inc | Plastic Omnium vs. Apple Inc |
| Boeing vs. TSOGO SUN GAMING | Boeing vs. Games Workshop Group | Boeing vs. Dairy Farm International | Boeing vs. Nufarm Limited |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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