Correlation Between Boeing and Kuaishou Technology

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

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

Diversification Opportunities for Boeing and Kuaishou Technology

-0.36

Correlation Coefficient

Boeing  Kuaishou Technology

Very good diversification

The 3 months correlation between Boeing and Kuaishou is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Kuaishou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuaishou Technology 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 Kuaishou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuaishou Technology has no effect on the direction of Boeing i.e., Boeing and Kuaishou Technology go up and down completely randomly.

Pair Corralation between Boeing and Kuaishou Technology

Allowing for the 90-day total investment horizon The Boeing is expected to generate 0.96 times more return on investment than Kuaishou Technology. However, The Boeing is 1.05 times less risky than Kuaishou Technology. It trades about 0.22 of its potential returns per unit of risk. Kuaishou Technology is currently generating about -0.04 per unit of risk. If you would invest  14,896  in The Boeing on September 12, 2024 and sell it today you would earn a total of  1,514  from holding The Boeing or generate 10.16% return on investment over 90 days.

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

The Boeing  vs.  Kuaishou Technology

Boeing

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Kuaishou Technology

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Boeing and Kuaishou Technology

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

The idea behind The Boeing and Kuaishou Technology 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.