Correlation Between Boeing and CrossFirst Bankshares

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

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

Diversification Opportunities for Boeing and CrossFirst Bankshares

0.33

Correlation Coefficient

Boeing  CrossFirst Bankshares

Weak diversification

The 3 months correlation between Boeing and CrossFirst is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares 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 CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of Boeing i.e., Boeing and CrossFirst Bankshares go up and down completely randomly.

Pair Corralation between Boeing and CrossFirst Bankshares

Allowing for the 90-day total investment horizon The Boeing is expected to generate 2.08 times more return on investment than CrossFirst Bankshares. However, Boeing is 2.08 times more volatile than CrossFirst Bankshares. It trades about 0.03 of its potential returns per unit of risk. CrossFirst Bankshares is currently generating about -0.09 per unit of risk. If you would invest  18,149  in The Boeing on February 7, 2025 and sell it today you would earn a total of  407.00  from holding The Boeing or generate 2.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	25.81%
Values	Daily Returns

The Boeing  vs.  CrossFirst Bankshares

Boeing

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Boeing is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CrossFirst Bankshares

Risk-Adjusted Performance

Very Weak

Over the last 90 days CrossFirst Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Boeing and CrossFirst Bankshares

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

The idea behind The Boeing and CrossFirst Bankshares 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.