Correlation Between Boeing and Energem Corp

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

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

Diversification Opportunities for Boeing and Energem Corp

-0.49

Correlation Coefficient

Boeing  Energem Corp

Very good diversification

The 3 months correlation between Boeing and Energem is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Energem Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energem Corp 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 Energem Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energem Corp has no effect on the direction of Boeing i.e., Boeing and Energem Corp go up and down completely randomly.

Pair Corralation between Boeing and Energem Corp

Allowing for the 90-day total investment horizon The Boeing is expected to generate 0.22 times more return on investment than Energem Corp. However, The Boeing is 4.59 times less risky than Energem Corp. It trades about -0.01 of its potential returns per unit of risk. Energem Corp is currently generating about -0.01 per unit of risk. If you would invest  19,821  in The Boeing on October 5, 2024 and sell it today you would lose (2,634) from holding The Boeing or give up 13.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	55.6%
Values	Daily Returns

The Boeing  vs.  Energem Corp

Boeing

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Boeing may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Energem Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energem Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Energem Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Boeing and Energem Corp

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

The idea behind The Boeing and Energem Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.