Correlation Between Boeing and BitFrontier Capital

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

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

Diversification Opportunities for Boeing and BitFrontier Capital

0.13

Correlation Coefficient

Boeing  BitFrontier Capital

Average diversification

The 3 months correlation between Boeing and BitFrontier is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and BitFrontier Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFrontier Capital 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 BitFrontier Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFrontier Capital has no effect on the direction of Boeing i.e., Boeing and BitFrontier Capital go up and down completely randomly.

Pair Corralation between Boeing and BitFrontier Capital

Allowing for the 90-day total investment horizon The Boeing is expected to generate 0.13 times more return on investment than BitFrontier Capital. However, The Boeing is 7.7 times less risky than BitFrontier Capital. It trades about -0.28 of its potential returns per unit of risk. BitFrontier Capital Holdings is currently generating about -0.4 per unit of risk. If you would invest  18,950  in The Boeing on January 31, 2024 and sell it today you would lose (1,601) from holding The Boeing or give up 8.45% of portfolio value over 90 days.

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

The Boeing  vs.  BitFrontier Capital Holdings

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

BitFrontier Capital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BitFrontier Capital Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, BitFrontier Capital demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boeing and BitFrontier Capital

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

The idea behind The Boeing and BitFrontier Capital Holdings 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.