Correlation Between Aerojet Rocketdyne and Sturm Ruger
Can any of the company-specific risk be diversified away by investing in both Aerojet Rocketdyne and Sturm Ruger 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 Sturm Ruger 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 Sturm Ruger, you can compare the effects of market volatilities on Aerojet Rocketdyne and Sturm Ruger 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 Sturm Ruger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerojet Rocketdyne and Sturm Ruger.
Diversification Opportunities for Aerojet Rocketdyne and Sturm Ruger
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aerojet and Sturm is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aerojet Rocketdyne Holdings and Sturm Ruger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sturm Ruger 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 Sturm Ruger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sturm Ruger has no effect on the direction of Aerojet Rocketdyne i.e., Aerojet Rocketdyne and Sturm Ruger go up and down completely randomly.
Pair Corralation between Aerojet Rocketdyne and Sturm Ruger
If you would invest 5,622 in Aerojet Rocketdyne Holdings on August 31, 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 | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Aerojet Rocketdyne Holdings vs. Sturm Ruger
Performance |
| Timeline |
| Aerojet Rocketdyne |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sturm Ruger |
Aerojet Rocketdyne and Sturm Ruger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerojet Rocketdyne and Sturm Ruger
The main advantage of trading using opposite Aerojet Rocketdyne and Sturm Ruger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerojet Rocketdyne position performs unexpectedly, Sturm Ruger 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 Sturm Ruger will offset losses from the drop in Sturm Ruger's long position.| Aerojet Rocketdyne vs. AAR Corp | Aerojet Rocketdyne vs. Curtiss Wright | Aerojet Rocketdyne vs. Hexcel | Aerojet Rocketdyne vs. Moog Inc |
| Sturm Ruger vs. Ammo Inc | Sturm Ruger vs. Kratos Defense Security | Sturm Ruger vs. VSE Corporation | Sturm Ruger vs. Ammo Preferred |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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