Correlation Between Aerojet Rocketdyne and L3Harris Technologies
Can any of the company-specific risk be diversified away by investing in both Aerojet Rocketdyne and L3Harris Technologies 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 Aerojet Rocketdyne and L3Harris Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerojet Rocketdyne Holdings and L3Harris Technologies, you can compare the effects of market volatilities on Aerojet Rocketdyne and L3Harris Technologies 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 Aerojet Rocketdyne with a short position of L3Harris Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerojet Rocketdyne and L3Harris Technologies.
Diversification Opportunities for Aerojet Rocketdyne and L3Harris Technologies
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aerojet and L3Harris is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aerojet Rocketdyne Holdings and L3Harris Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3Harris Technologies and Aerojet Rocketdyne 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 Aerojet Rocketdyne Holdings are associated (or correlated) with L3Harris Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3Harris Technologies has no effect on the direction of Aerojet Rocketdyne i.e., Aerojet Rocketdyne and L3Harris Technologies go up and down completely randomly.
Pair Corralation between Aerojet Rocketdyne and L3Harris Technologies
If you would invest 5,622 in Aerojet Rocketdyne Holdings on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Aerojet Rocketdyne Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Aerojet Rocketdyne Holdings vs. L3Harris Technologies
Performance |
| Timeline |
| Aerojet Rocketdyne |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| L3Harris Technologies |
Aerojet Rocketdyne and L3Harris Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerojet Rocketdyne and L3Harris Technologies
The main advantage of trading using opposite Aerojet Rocketdyne and L3Harris Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerojet Rocketdyne position performs unexpectedly, L3Harris Technologies 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 L3Harris Technologies will offset losses from the drop in L3Harris Technologies' long position.| Aerojet Rocketdyne vs. AAR Corp | Aerojet Rocketdyne vs. Curtiss Wright | Aerojet Rocketdyne vs. Hexcel | Aerojet Rocketdyne vs. Moog Inc |
| L3Harris Technologies vs. Lockheed Martin | L3Harris Technologies vs. General Dynamics | L3Harris Technologies vs. Raytheon Technologies Corp | L3Harris Technologies vs. Huntington Ingalls Industries |
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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