Correlation Between Boeing and IShares Core

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

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

Diversification Opportunities for Boeing and IShares Core

-0.39

Correlation Coefficient

Boeing  IShares Core

Very good diversification

The 3 months correlation between Boeing and IShares is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and iShares Core High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core High 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core High has no effect on the direction of Boeing i.e., Boeing and IShares Core go up and down completely randomly.

Pair Corralation between Boeing and IShares Core

Allowing for the 90-day total investment horizon The Boeing is expected to generate 2.26 times more return on investment than IShares Core. However, Boeing is 2.26 times more volatile than iShares Core High. It trades about 0.12 of its potential returns per unit of risk. iShares Core High is currently generating about -0.01 per unit of risk. If you would invest  15,544  in The Boeing on November 28, 2024 and sell it today you would earn a total of  1,761  from holding The Boeing or generate 11.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

The Boeing  vs.  iShares Core High

Boeing

Risk-Adjusted Performance

Good

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 may actually be approaching a critical reversion point that can send shares even higher in March 2025.

iShares Core High

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Core High has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, IShares Core is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Boeing and IShares Core

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

The idea behind The Boeing and iShares Core High 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.