Correlation Between Boeing and Enliven Therapeutics

Can any of the company-specific risk be diversified away by investing in both Boeing and Enliven Therapeutics 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 Enliven Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Boeing and Enliven Therapeutics, you can compare the effects of market volatilities on Boeing and Enliven Therapeutics 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 Enliven Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and Enliven Therapeutics.

Diversification Opportunities for Boeing and Enliven Therapeutics

-0.42

Correlation Coefficient

Boeing  Enliven Therapeutics

Very good diversification

The 3 months correlation between Boeing and Enliven is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Enliven Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enliven Therapeutics 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 The Boeing are associated (or correlated) with Enliven Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enliven Therapeutics has no effect on the direction of Boeing i.e., Boeing and Enliven Therapeutics go up and down completely randomly.

Pair Corralation between Boeing and Enliven Therapeutics

Allowing for the 90-day total investment horizon The Boeing is expected to generate 0.79 times more return on investment than Enliven Therapeutics. However, The Boeing is 1.27 times less risky than Enliven Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Enliven Therapeutics is currently generating about -0.16 per unit of risk. If you would invest  15,429  in The Boeing on August 31, 2024 and sell it today you would lose (189.00) from holding The Boeing or give up 1.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

The Boeing  vs.  Enliven Therapeutics

Boeing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Boeing 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 current stock price disturbance, may contribute to short-term losses for the investors.

Enliven Therapeutics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enliven Therapeutics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Enliven Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boeing and Enliven Therapeutics

The main advantage of trading using opposite Boeing and Enliven Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, Enliven Therapeutics 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 Enliven Therapeutics will offset losses from the drop in Enliven Therapeutics' long position.

The idea behind The Boeing and Enliven Therapeutics 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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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 the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.