Correlation Between Powered Brands and Boeing
Can any of the company-specific risk be diversified away by investing in both Powered Brands 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 Powered Brands and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Powered Brands and The Boeing, you can compare the effects of market volatilities on Powered Brands 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 Powered Brands with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powered Brands and Boeing.
Diversification Opportunities for Powered Brands and Boeing
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Powered and Boeing is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Powered Brands and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Powered Brands 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 Powered Brands 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 Powered Brands i.e., Powered Brands and Boeing go up and down completely randomly.
Pair Corralation between Powered Brands and Boeing
Assuming the 90 days horizon Powered Brands is expected to generate 29.01 times more return on investment than Boeing. However, Powered Brands is 29.01 times more volatile than The Boeing. It trades about 0.11 of its potential returns per unit of risk. The Boeing is currently generating about 0.02 per unit of risk. If you would invest 21.00 in Powered Brands on January 18, 2024 and sell it today you would lose (21.00) from holding Powered Brands or give up 100.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 26.46% |
Values | Daily Returns |
Powered Brands vs. The Boeing
Performance |
Timeline |
Powered Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boeing |
Powered Brands and Boeing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Powered Brands and Boeing
The main advantage of trading using opposite Powered Brands and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powered Brands 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.Powered Brands vs. Enlight Renewable Energy | Powered Brands vs. Par Pacific Holdings | Powered Brands vs. Atmos Energy | Powered Brands vs. Nextera Energy |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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