Correlation Between Boeing and AviChina Industry

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

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

Diversification Opportunities for Boeing and AviChina Industry

0.48

Correlation Coefficient

Boeing  AviChina Industry

Very weak diversification

The 3 months correlation between Boeing and AviChina is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and AviChina Industry Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AviChina Industry 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 AviChina Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AviChina Industry has no effect on the direction of Boeing i.e., Boeing and AviChina Industry go up and down completely randomly.

Pair Corralation between Boeing and AviChina Industry

Assuming the 90 days horizon The Boeing is expected to generate 0.62 times more return on investment than AviChina Industry. However, The Boeing is 1.61 times less risky than AviChina Industry. It trades about 0.21 of its potential returns per unit of risk. AviChina Industry Technology is currently generating about 0.12 per unit of risk. If you would invest  15,200  in The Boeing on April 23, 2025 and sell it today you would earn a total of  4,450  from holding The Boeing or generate 29.28% return on investment over 90 days.

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

The Boeing  vs.  AviChina Industry Technology

Boeing

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Boeing reported solid returns over the last few months and may actually be approaching a breakup point.

AviChina Industry

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AviChina Industry Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AviChina Industry reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boeing and AviChina Industry

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

The idea behind The Boeing and AviChina Industry 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.