Correlation Between Boeing and Sprott Physical

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

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

Diversification Opportunities for Boeing and Sprott Physical

-0.45

Correlation Coefficient

Boeing  Sprott Physical

Very good diversification

The 3 months correlation between Boeing and Sprott is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Sprott Physical Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Platinum 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 Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Platinum has no effect on the direction of Boeing i.e., Boeing and Sprott Physical go up and down completely randomly.

Pair Corralation between Boeing and Sprott Physical

Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Sprott Physical. In addition to that, Boeing is 1.27 times more volatile than Sprott Physical Platinum. It trades about -0.13 of its total potential returns per unit of risk. Sprott Physical Platinum is currently generating about 0.13 per unit of volatility. If you would invest  895.00  in Sprott Physical Platinum on February 28, 2024 and sell it today you would earn a total of  111.00  from holding Sprott Physical Platinum or generate 12.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

The Boeing  vs.  Sprott Physical Platinum

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 unsteady 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.

Sprott Physical Platinum

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Platinum are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sprott Physical may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Boeing and Sprott Physical

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

The idea behind The Boeing and Sprott Physical Platinum 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.