Correlation Between Sidus Space and Boeing

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

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

Diversification Opportunities for Sidus Space and Boeing

0.8

Correlation Coefficient

Sidus Space  Boeing

Very poor diversification

The 3 months correlation between Sidus and Boeing is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sidus Space and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Sidus Space 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 Sidus Space 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 Sidus Space i.e., Sidus Space and Boeing go up and down completely randomly.

Pair Corralation between Sidus Space and Boeing

Given the investment horizon of 90 days Sidus Space is expected to under-perform the Boeing. In addition to that, Sidus Space is 4.17 times more volatile than The Boeing. It trades about -0.12 of its total potential returns per unit of risk. The Boeing is currently generating about -0.03 per unit of volatility. If you would invest  15,632  in The Boeing on August 28, 2024 and sell it today you would lose (556.00) from holding The Boeing or give up 3.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Sidus Space  vs.  The Boeing

Sidus Space

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sidus Space has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 latest uncertain performance, the Stock's basic 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 Sidus Space and Boeing

The main advantage of trading using opposite Sidus Space and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidus Space 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 Sidus Space 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.

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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.