Correlation Between L3Harris Technologies and Boeing

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both L3Harris Technologies 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 L3Harris Technologies and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L3Harris Technologies and Boeing Company, you can compare the effects of market volatilities on L3Harris Technologies 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 L3Harris Technologies with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of L3Harris Technologies and Boeing.

Diversification Opportunities for L3Harris Technologies and Boeing

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between L3Harris and Boeing is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding L3Harris Technologies and Boeing Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing Company and L3Harris Technologies 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 L3Harris Technologies 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 Company has no effect on the direction of L3Harris Technologies i.e., L3Harris Technologies and Boeing go up and down completely randomly.

Pair Corralation between L3Harris Technologies and Boeing

Considering the 90-day investment horizon L3Harris Technologies is expected to generate 5.19 times less return on investment than Boeing. But when comparing it to its historical volatility, L3Harris Technologies is 1.36 times less risky than Boeing. It trades about 0.07 of its potential returns per unit of risk. Boeing Company is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  13,675  in Boeing Company on May 19, 2022 and sell it today you would earn a total of  3,533  from holding Boeing Company or generate 25.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.56%
ValuesDaily Returns

L3Harris Technologies  vs.  Boeing Company

 Performance (%) 
       Timeline  
L3Harris Technologies 
L3Harris Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in L3Harris Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, L3Harris Technologies is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

L3Harris Price Channel

Boeing Company 
Boeing Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Boeing Company are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat sluggish basic indicators, Boeing sustained solid returns over the last few months and may actually be approaching a breakup point.

Boeing Price Channel

L3Harris Technologies and Boeing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with L3Harris Technologies and Boeing

The main advantage of trading using opposite L3Harris Technologies and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L3Harris Technologies 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 L3Harris Technologies and Boeing 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.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go