Correlation Between Boeing and KFT

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

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

Diversification Opportunities for Boeing and KFT

0.0

Correlation Coefficient

Boeing  KFT

Pay attention - limited upside

The 3 months correlation between Boeing and KFT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and KFT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KFT 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 KFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KFT has no effect on the direction of Boeing i.e., Boeing and KFT go up and down completely randomly.

Pair Corralation between Boeing and KFT

If you would invest  14,861  in The Boeing on January 20, 2024 and sell it today you would earn a total of  2,162  from holding The Boeing or generate 14.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

The Boeing  vs.  KFT

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.

KFT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KFT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, KFT is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Boeing and KFT

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

The idea behind The Boeing and KFT 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.