Correlation Between Boeing and Wheels Up

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

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

Diversification Opportunities for Boeing and Wheels Up

-0.81

Correlation Coefficient

Boeing  Wheels Up

Pay attention - limited upside

The 3 months correlation between Boeing and Wheels is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Wheels Up Experience in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheels Up Experience 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 Wheels Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheels Up Experience has no effect on the direction of Boeing i.e., Boeing and Wheels Up go up and down completely randomly.

Pair Corralation between Boeing and Wheels Up

Allowing for the 90-day total investment horizon The Boeing is expected to generate 0.59 times more return on investment than Wheels Up. However, The Boeing is 1.69 times less risky than Wheels Up. It trades about -0.02 of its potential returns per unit of risk. Wheels Up Experience is currently generating about -0.42 per unit of risk. If you would invest  17,516  in The Boeing on November 28, 2024 and sell it today you would lose (211.00) from holding The Boeing or give up 1.2% of portfolio value over 90 days.

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

The Boeing  vs.  Wheels Up Experience

Boeing

Risk-Adjusted Performance

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

Wheels Up Experience

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wheels Up Experience has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Boeing and Wheels Up

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

The idea behind The Boeing and Wheels Up Experience 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.