Correlation Between Boeing and Exxon

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

Diversification Opportunities for Boeing and Exxon

-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Boeing and Exxon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Boeing Company and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Boeing i.e., Boeing and Exxon go up and down completely randomly.

Pair Corralation between Boeing and Exxon

Allowing for the 90-day total investment horizon Boeing is expected to generate 6.74 times less return on investment than Exxon. In addition to that, Boeing is 1.23 times more volatile than Exxon Mobil Corp. It trades about 0.01 of its total potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.09 per unit of volatility. If you would invest  3,646  in Exxon Mobil Corp on May 17, 2022 and sell it today you would earn a total of  5,342  from holding Exxon Mobil Corp or generate 146.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Boeing Company  vs.  Exxon Mobil Corp

 Performance (%) 
       Timeline  
Boeing Company 
Boeing Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Boeing Company are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Boeing sustained solid returns over the last few months and may actually be approaching a breakup point.

Boeing Price Channel

Exxon Mobil Corp 
Exxon Performance
0 of 100
Over the last 90 days Exxon Mobil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Exxon is not utilizing all of its potentials. The recent stock price chaos, may contribute to medium-term losses for the stakeholders.

Exxon Price Channel

Boeing and Exxon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Boeing and Exxon

The main advantage of trading using opposite Boeing and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.
The idea behind Boeing Company and Exxon Mobil Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

Other Complementary Tools

Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go