Correlation Between Boeing and Kernel Group

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

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

Diversification Opportunities for Boeing and Kernel Group

-0.62

Correlation Coefficient

Boeing  Kernel Group

Excellent diversification

The 3 months correlation between Boeing and Kernel is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Kernel Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kernel Group Holdings 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 Kernel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kernel Group Holdings has no effect on the direction of Boeing i.e., Boeing and Kernel Group go up and down completely randomly.

Pair Corralation between Boeing and Kernel Group

If you would invest (100.00) in Kernel Group Holdings on September 3, 2024 and sell it today you would earn a total of  100.00  from holding Kernel Group Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

The Boeing  vs.  Kernel Group Holdings

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Kernel Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kernel Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Kernel Group is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Boeing and Kernel Group

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

The idea behind The Boeing and Kernel Group Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.