Correlation Between Alfa SAB and Boeing
Can any of the company-specific risk be diversified away by investing in both Alfa SAB 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 Alfa SAB and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa SAB de and The Boeing, you can compare the effects of market volatilities on Alfa SAB 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 Alfa SAB with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa SAB and Boeing.
Diversification Opportunities for Alfa SAB and Boeing
Modest diversification
The 3 months correlation between Alfa and Boeing is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Alfa SAB de and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Alfa SAB 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 Alfa SAB de 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 Alfa SAB i.e., Alfa SAB and Boeing go up and down completely randomly.
Pair Corralation between Alfa SAB and Boeing
Assuming the 90 days trading horizon Alfa SAB is expected to generate 11.21 times less return on investment than Boeing. In addition to that, Alfa SAB is 1.34 times more volatile than The Boeing. It trades about 0.03 of its total potential returns per unit of risk. The Boeing is currently generating about 0.46 per unit of volatility. If you would invest 307,228 in The Boeing on September 24, 2024 and sell it today you would earn a total of 47,772 from holding The Boeing or generate 15.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Alfa SAB de vs. The Boeing
Performance |
Timeline |
Alfa SAB de |
Boeing |
Alfa SAB and Boeing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alfa SAB and Boeing
The main advantage of trading using opposite Alfa SAB and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa SAB 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.Alfa SAB vs. Grupo Mxico SAB | Alfa SAB vs. Fomento Econmico Mexicano | Alfa SAB vs. CEMEX SAB de | Alfa SAB vs. Gruma SAB de |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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