Correlation Between Boeing and Eastern

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

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

Diversification Opportunities for Boeing and Eastern

0.0

Correlation Coefficient

Boeing  Eastern

Pay attention - limited upside

The 3 months correlation between Boeing and Eastern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Eastern Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Company 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Company has no effect on the direction of Boeing i.e., Boeing and Eastern go up and down completely randomly.

Pair Corralation between Boeing and Eastern

If you would invest  17,835  in The Boeing on March 7, 2024 and sell it today you would earn a total of  1,027  from holding The Boeing or generate 5.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

The Boeing  vs.  Eastern Company

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 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.

Eastern Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastern Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Eastern is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Boeing and Eastern

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

The idea behind The Boeing and Eastern Company 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.