Correlation Between Harley Davidson and Boeing

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

Diversification Opportunities for Harley Davidson and Boeing

  Correlation Coefficient

Very weak diversification

The 3 months correlation between Harley and Boeing is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Harley-Davidson and Boeing Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing Company and Harley Davidson 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 Harley-Davidson 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 Harley Davidson i.e., Harley Davidson and Boeing go up and down completely randomly.

Pair Corralation between Harley Davidson and Boeing

Considering the 90-day investment horizon Harley-Davidson is expected to generate 1.08 times more return on investment than Boeing. However, Harley Davidson is 1.08 times more volatile than Boeing Company. It trades about 0.02 of its potential returns per unit of risk. Boeing Company is currently generating about -0.02 per unit of risk. If you would invest  3,498  in Harley-Davidson on July 9, 2022 and sell it today you would earn a total of  112.00  from holding Harley-Davidson or generate 3.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Harley-Davidson  vs.  Boeing Company

 Performance (%) 
Harley Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Harley-Davidson are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Harley Davidson exhibited solid returns over the last few months and may actually be approaching a breakup point.

Harley Price Channel

Boeing Company 
Boeing Performance
0 of 100
Over the last 90 days Boeing Company 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.

Boeing Price Channel

Harley Davidson and Boeing Volatility Contrast

   Predicted Return Density   

Pair Trading with Harley Davidson and Boeing

The main advantage of trading using opposite Harley Davidson and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harley Davidson 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.
Harley Davidson vs. Amazon Inc
The idea behind Harley-Davidson 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.
Boeing vs. Amazon Inc
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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