Correlation Between Aerojet Rocketdyne and Park Electrochemical
Can any of the company-specific risk be diversified away by investing in both Aerojet Rocketdyne and Park Electrochemical 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 Park Electrochemical 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 Park Electrochemical, you can compare the effects of market volatilities on Aerojet Rocketdyne and Park Electrochemical 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 Park Electrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerojet Rocketdyne and Park Electrochemical.
Diversification Opportunities for Aerojet Rocketdyne and Park Electrochemical
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aerojet and Park is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aerojet Rocketdyne Holdings and Park Electrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Electrochemical 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 Park Electrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Electrochemical has no effect on the direction of Aerojet Rocketdyne i.e., Aerojet Rocketdyne and Park Electrochemical go up and down completely randomly.
Pair Corralation between Aerojet Rocketdyne and Park Electrochemical
If you would invest 1,429 in Park Electrochemical on August 27, 2024 and sell it today you would earn a total of 109.00 from holding Park Electrochemical or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Aerojet Rocketdyne Holdings vs. Park Electrochemical
Performance |
| Timeline |
| Aerojet Rocketdyne |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Park Electrochemical |
Aerojet Rocketdyne and Park Electrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerojet Rocketdyne and Park Electrochemical
The main advantage of trading using opposite Aerojet Rocketdyne and Park Electrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerojet Rocketdyne position performs unexpectedly, Park Electrochemical 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 Park Electrochemical will offset losses from the drop in Park Electrochemical's long position.| Aerojet Rocketdyne vs. AAR Corp | Aerojet Rocketdyne vs. Curtiss Wright | Aerojet Rocketdyne vs. Hexcel | Aerojet Rocketdyne vs. Moog Inc |
| Park Electrochemical vs. Innovative Solutions and | Park Electrochemical vs. VSE Corporation | Park Electrochemical vs. Curtiss Wright | Park Electrochemical vs. Ducommun Incorporated |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |