Correlation Between Boeing and Coda Octopus

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

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

Diversification Opportunities for Boeing and Coda Octopus

-0.28

Correlation Coefficient

Boeing  Coda Octopus

Very good diversification

The 3 months correlation between Boeing and Coda is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group 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 Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of Boeing i.e., Boeing and Coda Octopus go up and down completely randomly.

Pair Corralation between Boeing and Coda Octopus

Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Coda Octopus. But the stock apears to be less risky and, when comparing its historical volatility, The Boeing is 1.54 times less risky than Coda Octopus. The stock trades about -0.03 of its potential returns per unit of risk. The Coda Octopus Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  811.00  in Coda Octopus Group on January 25, 2024 and sell it today you would lose (155.00) from holding Coda Octopus Group or give up 19.11% of portfolio value over 90 days.

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

The Boeing  vs.  Coda Octopus Group

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 May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Coda Octopus Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Coda Octopus may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Boeing and Coda Octopus

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

The idea behind The Boeing and Coda Octopus Group 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..