Correlation Between Boeing and Astronics

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

Diversification Opportunities for Boeing and Astronics

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Boeing and Astronics is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Boeing Company and Astronics Cp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics Cp 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 Astronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics Cp has no effect on the direction of Boeing i.e., Boeing and Astronics go up and down completely randomly.

Pair Corralation between Boeing and Astronics

Allowing for the 90-day total investment horizon Boeing Company is expected to generate 0.77 times more return on investment than Astronics. However, Boeing Company is 1.3 times less risky than Astronics. It trades about -0.01 of its potential returns per unit of risk. Astronics Cp is currently generating about -0.01 per unit of risk. If you would invest  23,657  in Boeing Company on August 30, 2022 and sell it today you would lose (6,474)  from holding Boeing Company or give up 27.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Boeing Company  vs.  Astronics Cp

 Performance (%) 
       Timeline  
Boeing Company 
Boeing Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Boeing Company are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat sluggish basic indicators, Boeing may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Boeing Price Channel

Astronics Cp 
Astronics Performance
0 of 100
Over the last 90 days Astronics Cp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Astronics Price Channel

Boeing and Astronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Boeing and Astronics

The main advantage of trading using opposite Boeing and Astronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Astronics 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 Astronics will offset losses from the drop in Astronics' long position.
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The idea behind Boeing Company and Astronics Cp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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