Correlation Between Boeing and Bank of Utica
Can any of the company-specific risk be diversified away by investing in both Boeing and Bank of Utica 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 Bank of Utica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and Bank of Utica, you can compare the effects of market volatilities on Boeing and Bank of Utica 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 Bank of Utica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Bank of Utica.
Diversification Opportunities for Boeing and Bank of Utica
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boeing and Bank is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Bank of Utica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Utica 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 Bank of Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Utica has no effect on the direction of Boeing i.e., Boeing and Bank of Utica go up and down completely randomly.
Pair Corralation between Boeing and Bank of Utica
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Bank of Utica. In addition to that, Boeing is 1.05 times more volatile than Bank of Utica. It trades about -0.05 of its total potential returns per unit of risk. Bank of Utica is currently generating about -0.05 per unit of volatility. If you would invest 47,000 in Bank of Utica on June 22, 2024 and sell it today you would lose (4,400) from holding Bank of Utica or give up 9.36% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.8% |
Values | Daily Returns |
The Boeing vs. Bank of Utica
Performance |
Timeline |
Boeing |
Bank of Utica |
Boeing and Bank of Utica Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boeing and Bank of Utica
The main advantage of trading using opposite Boeing and Bank of Utica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Bank of Utica 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 Bank of Utica will offset losses from the drop in Bank of Utica's long position.Boeing vs. Raytheon Technologies Corp | Boeing vs. Northrop Grumman | Boeing vs. General Dynamics | Boeing vs. L3Harris Technologies |
Bank of Utica vs. Greenville Federal Financial | Bank of Utica vs. First Ottawa Bancshares | Bank of Utica vs. Coastal Carolina Bancshares | Bank of Utica vs. First Bankers Trustshares |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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