Correlation Between Boeing and Cubic

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

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

Diversification Opportunities for Boeing and Cubic

0.0

Correlation Coefficient

Boeing  Cubic

Pay attention - limited upside

The 3 months correlation between Boeing and Cubic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Cubic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cubic 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 Cubic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cubic has no effect on the direction of Boeing i.e., Boeing and Cubic go up and down completely randomly.

Pair Corralation between Boeing and Cubic

If you would invest  13,925  in The Boeing on February 23, 2024 and sell it today you would earn a total of  4,703  from holding The Boeing or generate 33.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

The Boeing  vs.  Cubic

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Cubic

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Boeing and Cubic

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

The idea behind The Boeing and Cubic 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.