Correlation Between Boeing and CARGIL

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

By analyzing existing cross correlation between The Boeing and CARGIL 4875 10 OCT 25, you can compare the effects of market volatilities on Boeing and CARGIL 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 CARGIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and CARGIL.

Diversification Opportunities for Boeing and CARGIL

-0.35

Correlation Coefficient

Boeing  CARGIL

Very good diversification

The 3 months correlation between Boeing and CARGIL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and CARGIL 4875 10 OCT 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARGIL 4875 10 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 CARGIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARGIL 4875 10 has no effect on the direction of Boeing i.e., Boeing and CARGIL go up and down completely randomly.

Pair Corralation between Boeing and CARGIL

Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the CARGIL. In addition to that, Boeing is 10.18 times more volatile than CARGIL 4875 10 OCT 25. It trades about -0.03 of its total potential returns per unit of risk. CARGIL 4875 10 OCT 25 is currently generating about 0.1 per unit of volatility. If you would invest  10,043  in CARGIL 4875 10 OCT 25 on September 5, 2024 and sell it today you would earn a total of  68.00  from holding CARGIL 4875 10 OCT 25 or generate 0.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	54.69%
Values	Daily Returns

The Boeing  vs.  CARGIL 4875 10 OCT 25

Boeing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Boeing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Boeing is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CARGIL 4875 10

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CARGIL 4875 10 OCT 25 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CARGIL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boeing and CARGIL

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

The idea behind The Boeing and CARGIL 4875 10 OCT 25 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.