Correlation Between Nio and Boeing

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

Diversification Opportunities for Nio and Boeing

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Nio and Boeing is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Nio Class A and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Nio 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 Nio Class A are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Nio i.e., Nio and Boeing go up and down completely randomly.

Pair Corralation between Nio and Boeing

Considering the 90-day investment horizon Nio Class A is expected to under-perform the Boeing. In addition to that, Nio is 1.98 times more volatile than The Boeing. It trades about -0.27 of its total potential returns per unit of risk. The Boeing is currently generating about -0.09 per unit of volatility. If you would invest  20,140  in The Boeing on December 29, 2023 and sell it today you would lose (841.00) from holding The Boeing or give up 4.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Nio Class A  vs.  The Boeing

 Performance 
       Timeline  
Nio Class A 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Nio Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.
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.

Nio and Boeing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nio and Boeing

The main advantage of trading using opposite Nio and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nio position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.
The idea behind Nio Class A and The Boeing 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios