Correlation Between Spirit Aerosystems and Boeing
Can any of the company-specific risk be diversified away by investing in both Spirit Aerosystems and Boeing 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 Spirit Aerosystems and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirit Aerosystems Holdings and The Boeing, you can compare the effects of market volatilities on Spirit Aerosystems and Boeing 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 Spirit Aerosystems with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirit Aerosystems and Boeing.
Diversification Opportunities for Spirit Aerosystems and Boeing
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Spirit and Boeing is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Aerosystems Holdings and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Spirit Aerosystems 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 Spirit Aerosystems Holdings are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Spirit Aerosystems i.e., Spirit Aerosystems and Boeing go up and down completely randomly.
Pair Corralation between Spirit Aerosystems and Boeing
Considering the 90-day investment horizon Spirit Aerosystems is expected to generate 2.14 times less return on investment than Boeing. But when comparing it to its historical volatility, Spirit Aerosystems Holdings is 1.52 times less risky than Boeing. It trades about 0.17 of its potential returns per unit of risk. The Boeing is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 19,853 in The Boeing on March 11, 2025 and sell it today you would earn a total of 1,227 from holding The Boeing or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirit Aerosystems Holdings vs. The Boeing
Performance |
| Timeline |
| Spirit Aerosystems |
| Boeing |
Spirit Aerosystems and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirit Aerosystems and Boeing
The main advantage of trading using opposite Spirit Aerosystems and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Aerosystems position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.| Spirit Aerosystems vs. Howmet Aerospace | Spirit Aerosystems vs. Huntington Ingalls Industries | Spirit Aerosystems vs. L3Harris Technologies | Spirit Aerosystems vs. Embraer SA ADR |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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