Correlation Between Boeing and Shaw Communications

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

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

Diversification Opportunities for Boeing and Shaw Communications

-0.23

Correlation Coefficient

Boeing  Shaw Communications

Very good diversification

The 3 months correlation between Boeing and Shaw is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and Shaw Communications Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaw Communications Class 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 Shaw Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaw Communications Class has no effect on the direction of Boeing i.e., Boeing and Shaw Communications go up and down completely randomly.

Pair Corralation between Boeing and Shaw Communications

Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the Shaw Communications. In addition to that, Boeing is 1.51 times more volatile than Shaw Communications Class. It trades about -0.01 of its total potential returns per unit of risk. Shaw Communications Class is currently generating about 0.14 per unit of volatility. If you would invest  2,655  in Shaw Communications Class on September 5, 2024 and sell it today you would earn a total of  363.00  from holding Shaw Communications Class or generate 13.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	15.15%
Values	Daily Returns

The Boeing  vs.  Shaw Communications Class

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

Shaw Communications Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shaw Communications Class has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking indicators, Shaw Communications is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Boeing and Shaw Communications

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

The idea behind The Boeing and Shaw Communications Class 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.