Correlation Between Boeing and CleanGo Innovations

Can any of the company-specific risk be diversified away by investing in both Boeing and CleanGo Innovations 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 Boeing and CleanGo Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Boeing and CleanGo Innovations, you can compare the effects of market volatilities on Boeing and CleanGo Innovations 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 Boeing with a short position of CleanGo Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and CleanGo Innovations.

Diversification Opportunities for Boeing and CleanGo Innovations

0.35

Correlation Coefficient

Boeing  CleanGo Innovations

Weak diversification

The 3 months correlation between Boeing and CleanGo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and CleanGo Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanGo Innovations and Boeing 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 The Boeing are associated (or correlated) with CleanGo Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanGo Innovations has no effect on the direction of Boeing i.e., Boeing and CleanGo Innovations go up and down completely randomly.

Pair Corralation between Boeing and CleanGo Innovations

Allowing for the 90-day total investment horizon The Boeing is expected to generate 0.54 times more return on investment than CleanGo Innovations. However, The Boeing is 1.84 times less risky than CleanGo Innovations. It trades about 0.12 of its potential returns per unit of risk. CleanGo Innovations is currently generating about -0.04 per unit of risk. If you would invest  15,501  in The Boeing on October 25, 2024 and sell it today you would earn a total of  1,979  from holding The Boeing or generate 12.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

The Boeing  vs.  CleanGo Innovations

Boeing

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Boeing sustained solid returns over the last few months and may actually be approaching a breakup point.

CleanGo Innovations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CleanGo Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Boeing and CleanGo Innovations

The main advantage of trading using opposite Boeing and CleanGo Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, CleanGo Innovations 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 CleanGo Innovations will offset losses from the drop in CleanGo Innovations' long position.

The idea behind The Boeing and CleanGo Innovations pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.