Correlation Between Aerojet Rocketdyne and SIFCO Industries
Can any of the company-specific risk be diversified away by investing in both Aerojet Rocketdyne and SIFCO Industries 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 SIFCO Industries 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 SIFCO Industries, you can compare the effects of market volatilities on Aerojet Rocketdyne and SIFCO Industries 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 SIFCO Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerojet Rocketdyne and SIFCO Industries.
Diversification Opportunities for Aerojet Rocketdyne and SIFCO Industries
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aerojet and SIFCO is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aerojet Rocketdyne Holdings and SIFCO Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIFCO Industries 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 SIFCO Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIFCO Industries has no effect on the direction of Aerojet Rocketdyne i.e., Aerojet Rocketdyne and SIFCO Industries go up and down completely randomly.
Pair Corralation between Aerojet Rocketdyne and SIFCO Industries
If you would invest 441.00 in SIFCO Industries on September 1, 2024 and sell it today you would lose (66.00) from holding SIFCO Industries or give up 14.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.37% |
| Values | Daily Returns |
Aerojet Rocketdyne Holdings vs. SIFCO Industries
Performance |
| Timeline |
| Aerojet Rocketdyne |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SIFCO Industries |
Aerojet Rocketdyne and SIFCO Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerojet Rocketdyne and SIFCO Industries
The main advantage of trading using opposite Aerojet Rocketdyne and SIFCO Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerojet Rocketdyne position performs unexpectedly, SIFCO Industries 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 SIFCO Industries will offset losses from the drop in SIFCO Industries' long position.| Aerojet Rocketdyne vs. AAR Corp | Aerojet Rocketdyne vs. Curtiss Wright | Aerojet Rocketdyne vs. Hexcel | Aerojet Rocketdyne vs. Moog Inc |
| SIFCO Industries vs. Ducommun Incorporated | SIFCO Industries vs. Park Electrochemical | SIFCO Industries vs. National Presto Industries | SIFCO Industries vs. Astronics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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