Correlation Between Boeing and Ehang Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Boeing and Ehang Holdings 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 Ehang Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Ehang Holdings, you can compare the effects of market volatilities on Boeing and Ehang Holdings 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 Ehang Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Ehang Holdings.

Diversification Opportunities for Boeing and Ehang Holdings

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Boeing and Ehang is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Ehang Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ehang Holdings 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 Ehang Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ehang Holdings has no effect on the direction of Boeing i.e., Boeing and Ehang Holdings go up and down completely randomly.

Pair Corralation between Boeing and Ehang Holdings

Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Ehang Holdings. But the stock apears to be less risky and, when comparing its historical volatility, The Boeing is 3.67 times less risky than Ehang Holdings. The stock trades about -0.38 of its potential returns per unit of risk. The Ehang Holdings is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  1,024  in Ehang Holdings on December 19, 2023 and sell it today you would earn a total of  526.00  from holding Ehang Holdings or generate 51.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

The Boeing  vs.  Ehang Holdings

 Performance 
       Timeline  
Boeing 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Ehang Holdings 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Ehang Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Ehang Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Boeing and Ehang Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Boeing and Ehang Holdings

The main advantage of trading using opposite Boeing and Ehang Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Ehang Holdings 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 Ehang Holdings will offset losses from the drop in Ehang Holdings' long position.
The idea behind The Boeing and Ehang 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.
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Stocks Directory
Find actively traded stocks across global markets
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance