Correlation Between Knife River and Boeing
Can any of the company-specific risk be diversified away by investing in both Knife River 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 Knife River and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and The Boeing, you can compare the effects of market volatilities on Knife River 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 Knife River with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and Boeing.
Diversification Opportunities for Knife River and Boeing
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Knife and Boeing is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Knife River 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 Knife River 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 Knife River i.e., Knife River and Boeing go up and down completely randomly.
Pair Corralation between Knife River and Boeing
Considering the 90-day investment horizon Knife River is expected to generate 1.38 times more return on investment than Boeing. However, Knife River is 1.38 times more volatile than The Boeing. It trades about 0.14 of its potential returns per unit of risk. The Boeing is currently generating about 0.03 per unit of risk. If you would invest 9,575 in Knife River on August 29, 2024 and sell it today you would earn a total of 883.00 from holding Knife River or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knife River vs. The Boeing
Performance |
| Timeline |
| Knife River |
| Boeing |
Knife River and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and Boeing
The main advantage of trading using opposite Knife River and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River 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.| Knife River vs. Cemex SAB de | Knife River vs. Boise Cascad Llc | Knife River vs. CRH PLC ADR | Knife River vs. Eagle Materials |
| Boeing vs. ABIVAX Socit Anonyme | Boeing vs. Morningstar Unconstrained Allocation | Boeing vs. SPACE | Boeing vs. Knife River |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |