Correlation Between Aerojet Rocketdyne and National Presto
Can any of the company-specific risk be diversified away by investing in both Aerojet Rocketdyne and National Presto 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 National Presto 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 National Presto Industries, you can compare the effects of market volatilities on Aerojet Rocketdyne and National Presto 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 National Presto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerojet Rocketdyne and National Presto.
Diversification Opportunities for Aerojet Rocketdyne and National Presto
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aerojet and National is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aerojet Rocketdyne Holdings and National Presto Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Presto Indu 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 National Presto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Presto Indu has no effect on the direction of Aerojet Rocketdyne i.e., Aerojet Rocketdyne and National Presto go up and down completely randomly.
Pair Corralation between Aerojet Rocketdyne and National Presto
If you would invest 7,450 in National Presto Industries on August 31, 2024 and sell it today you would earn a total of 408.00 from holding National Presto Industries or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Aerojet Rocketdyne Holdings vs. National Presto Industries
Performance |
| Timeline |
| Aerojet Rocketdyne |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| National Presto Indu |
Aerojet Rocketdyne and National Presto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerojet Rocketdyne and National Presto
The main advantage of trading using opposite Aerojet Rocketdyne and National Presto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerojet Rocketdyne position performs unexpectedly, National Presto 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 National Presto will offset losses from the drop in National Presto's long position.| Aerojet Rocketdyne vs. AAR Corp | Aerojet Rocketdyne vs. Curtiss Wright | Aerojet Rocketdyne vs. Hexcel | Aerojet Rocketdyne vs. Moog Inc |
| National Presto vs. Park Electrochemical | National Presto vs. Ducommun Incorporated | National Presto vs. Innovative Solutions and | National Presto vs. VSE Corporation |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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