Correlation Between Boeing and Copper Fox

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

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

Diversification Opportunities for Boeing and Copper Fox

Good diversification

The 3 months correlation between Boeing and Copper is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Copper Fox Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Fox Metals 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 Copper Fox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Fox Metals has no effect on the direction of Boeing i.e., Boeing and Copper Fox go up and down completely randomly.

Pair Corralation between Boeing and Copper Fox

If you would invest  0.00  in Copper Fox Metals on June 27, 2023 and sell it today you would earn a total of  0.00  from holding Copper Fox Metals or generate 0.0% return on investment over 90 days.

The Boeing  vs.  Copper Fox Metals

Boeing

Boeing Performance

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

Copper Fox Metals

Copper Performance

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Over the last 90 days Copper Fox Metals 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 nearly stable which may send shares a bit higher in October 2023. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Boeing and Copper Fox

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

The idea behind The Boeing and Copper Fox Metals 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.

Check out your portfolio center. 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.