Correlation Between Boeing and Global Bond

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Can any of the company-specific risk be diversified away by investing in both Boeing and Global Bond 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 Global Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boeing Company and Global Bond Fund, you can compare the effects of market volatilities on Boeing and Global Bond 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 Global Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Global Bond.

Diversification Opportunities for Boeing and Global Bond

  Correlation Coefficient

Weak diversification

The 3 months correlation between Boeing and Global is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Boeing Company and Global Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Bond Fund 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 Boeing Company are associated (or correlated) with Global Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Bond Fund has no effect on the direction of Boeing i.e., Boeing and Global Bond go up and down completely randomly.

Pair Corralation between Boeing and Global Bond

Allowing for the 90-day total investment horizon Boeing Company is expected to under-perform the Global Bond. In addition to that, Boeing is 10.1 times more volatile than Global Bond Fund. It trades about -0.01 of its total potential returns per unit of risk. Global Bond Fund is currently generating about -0.09 per unit of volatility. If you would invest  1,008  in Global Bond Fund on August 28, 2022 and sell it today you would lose (113.00)  from holding Global Bond Fund or give up 11.21% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

Boeing Company  vs.  Global Bond Fund

 Performance (%) 
Boeing Company 
Boeing Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Boeing Company are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Boeing may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Boeing Price Channel

Global Bond Fund 
Global Performance
0 of 100
Over the last 90 days Global Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Global Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Global Price Channel

Boeing and Global Bond Volatility Contrast

   Predicted Return Density   

Pair Trading with Boeing and Global Bond

The main advantage of trading using opposite Boeing and Global Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Global Bond 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 Global Bond will offset losses from the drop in Global Bond's long position.
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The idea behind Boeing Company and Global Bond Fund 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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