Correlation Between KWESST Micro and Boeing

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

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

Diversification Opportunities for KWESST Micro and Boeing

0.19

Correlation Coefficient

KWESST Micro  Boeing

Average diversification

The 3 months correlation between KWESST and Boeing is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding KWESST Micro Systems and Boeing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and KWESST Micro 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 KWESST Micro Systems 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 KWESST Micro i.e., KWESST Micro and Boeing go up and down completely randomly.

Pair Corralation between KWESST Micro and Boeing

Considering the 90-day investment horizon KWESST Micro Systems is expected to under-perform the Boeing. In addition to that, KWESST Micro is 5.86 times more volatile than Boeing Co. It trades about -0.09 of its total potential returns per unit of risk. Boeing Co is currently generating about 0.01 per unit of volatility. If you would invest  6,105  in Boeing Co on December 28, 2024 and sell it today you would earn a total of  25.00  from holding Boeing Co or generate 0.41% return on investment over 90 days.

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

KWESST Micro Systems  vs.  Boeing Co

KWESST Micro Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days KWESST Micro Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Boeing

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boeing Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Boeing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KWESST Micro and Boeing

The main advantage of trading using opposite KWESST Micro and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KWESST Micro 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 KWESST Micro Systems 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..