Correlation Between Compania and Boeing Co

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

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

Diversification Opportunities for Compania and Boeing Co

-0.22

Correlation Coefficient

Compania  Boeing Co

Very good diversification

The 3 months correlation between Compania and Boeing is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Compania de Transporte and Boeing Co CEDEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing Co CEDEAR and Compania 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 Compania de Transporte are associated (or correlated) with Boeing Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing Co CEDEAR has no effect on the direction of Compania i.e., Compania and Boeing Co go up and down completely randomly.

Pair Corralation between Compania and Boeing Co

Assuming the 90 days trading horizon Compania de Transporte is expected to under-perform the Boeing Co. In addition to that, Compania is 1.61 times more volatile than Boeing Co CEDEAR. It trades about -0.1 of its total potential returns per unit of risk. Boeing Co CEDEAR is currently generating about 0.07 per unit of volatility. If you would invest  874,000  in Boeing Co CEDEAR on December 30, 2024 and sell it today you would earn a total of  71,000  from holding Boeing Co CEDEAR or generate 8.12% return on investment over 90 days.

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

Compania de Transporte  vs.  Boeing Co CEDEAR

Compania de Transporte

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compania de Transporte has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Boeing Co CEDEAR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boeing Co CEDEAR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Boeing Co may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Compania and Boeing Co

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

The idea behind Compania de Transporte and Boeing Co CEDEAR 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.