Correlation Between Ehang Holdings and Boeing

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

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

Diversification Opportunities for Ehang Holdings and Boeing

-0.26

Correlation Coefficient

Ehang Holdings  Boeing

Very good diversification

The 3 months correlation between Ehang and Boeing is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ehang Holdings and Boeing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Ehang Holdings 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 Ehang Holdings are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Ehang Holdings i.e., Ehang Holdings and Boeing go up and down completely randomly.

Pair Corralation between Ehang Holdings and Boeing

Allowing for the 90-day total investment horizon Ehang Holdings is expected to generate 4.09 times more return on investment than Boeing. However, Ehang Holdings is 4.09 times more volatile than Boeing Co. It trades about 0.1 of its potential returns per unit of risk. Boeing Co is currently generating about 0.08 per unit of risk. If you would invest  1,201  in Ehang Holdings on September 4, 2024 and sell it today you would earn a total of  363.00  from holding Ehang Holdings or generate 30.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	39.06%
Values	Daily Returns

Ehang Holdings  vs.  Boeing Co

Ehang Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ehang Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Ehang Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Boeing

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boeing Co are ranked lower than 6 (%) 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 January 2025.

Pair Trading with Ehang Holdings and Boeing

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

The idea behind Ehang Holdings and Boeing Co 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.