Correlation Between American Defense and HEICO
Can any of the company-specific risk be diversified away by investing in both American Defense and HEICO 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 American Defense and HEICO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Defense Systems and HEICO, you can compare the effects of market volatilities on American Defense and HEICO 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 American Defense with a short position of HEICO. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Defense and HEICO.
Diversification Opportunities for American Defense and HEICO
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and HEICO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Defense Systems and HEICO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEICO and American Defense 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 American Defense Systems are associated (or correlated) with HEICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEICO has no effect on the direction of American Defense i.e., American Defense and HEICO go up and down completely randomly.
Pair Corralation between American Defense and HEICO
If you would invest 19,436 in HEICO on August 27, 2024 and sell it today you would earn a total of 2,121 from holding HEICO or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
American Defense Systems vs. HEICO
Performance |
| Timeline |
| American Defense Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HEICO |
American Defense and HEICO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Defense and HEICO
The main advantage of trading using opposite American Defense and HEICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Defense position performs unexpectedly, HEICO 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 HEICO will offset losses from the drop in HEICO's long position.| American Defense vs. PME Inc | American Defense vs. Electro Optic Systems | American Defense vs. Astronics Corp Cl | American Defense vs. V2X Inc |
| HEICO vs. Vertical Aerospace | HEICO vs. Rolls Royce Holdings plc | HEICO vs. Embraer SA ADR | HEICO vs. Rocket Lab USA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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