Correlation Between Boeing and NLIGHT
Can any of the company-specific risk be diversified away by investing in both Boeing and NLIGHT 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 NLIGHT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and nLIGHT Inc, you can compare the effects of market volatilities on Boeing and NLIGHT 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 NLIGHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and NLIGHT.
Diversification Opportunities for Boeing and NLIGHT
Very good diversification
The 3 months correlation between Boeing and NLIGHT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and nLIGHT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nLIGHT Inc 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 NLIGHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nLIGHT Inc has no effect on the direction of Boeing i.e., Boeing and NLIGHT go up and down completely randomly.
Pair Corralation between Boeing and NLIGHT
Allowing for the 90-day total investment horizon The Boeing is expected to under-perform the NLIGHT. But the stock apears to be less risky and, when comparing its historical volatility, The Boeing is 3.03 times less risky than NLIGHT. The stock trades about -0.06 of its potential returns per unit of risk. The nLIGHT Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,934 in nLIGHT Inc on July 27, 2025 and sell it today you would earn a total of 1,326 from holding nLIGHT Inc or generate 68.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boeing vs. nLIGHT Inc
Performance |
| Timeline |
| Boeing |
| nLIGHT Inc |
Boeing and NLIGHT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and NLIGHT
The main advantage of trading using opposite Boeing and NLIGHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, NLIGHT 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 NLIGHT will offset losses from the drop in NLIGHT's long position.| Boeing vs. Lockheed Martin | Boeing vs. Raytheon Technologies Corp | Boeing vs. Northrop Grumman | Boeing vs. Eaton PLC |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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