Correlation Between Aerojet Rocketdyne and VSE
Can any of the company-specific risk be diversified away by investing in both Aerojet Rocketdyne and VSE 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 VSE 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 VSE Corporation, you can compare the effects of market volatilities on Aerojet Rocketdyne and VSE 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 VSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerojet Rocketdyne and VSE.
Diversification Opportunities for Aerojet Rocketdyne and VSE
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aerojet and VSE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aerojet Rocketdyne Holdings and VSE Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VSE Corporation 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 VSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VSE Corporation has no effect on the direction of Aerojet Rocketdyne i.e., Aerojet Rocketdyne and VSE go up and down completely randomly.
Pair Corralation between Aerojet Rocketdyne and VSE
If you would invest 10,470 in VSE Corporation on August 28, 2024 and sell it today you would earn a total of 1,139 from holding VSE Corporation or generate 10.88% 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. VSE Corp.
Performance |
| Timeline |
| Aerojet Rocketdyne |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| VSE Corporation |
Aerojet Rocketdyne and VSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerojet Rocketdyne and VSE
The main advantage of trading using opposite Aerojet Rocketdyne and VSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerojet Rocketdyne position performs unexpectedly, VSE 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 VSE will offset losses from the drop in VSE's long position.| Aerojet Rocketdyne vs. AAR Corp | Aerojet Rocketdyne vs. Curtiss Wright | Aerojet Rocketdyne vs. Hexcel | Aerojet Rocketdyne vs. Moog Inc |
| VSE vs. Park Electrochemical | VSE vs. Innovative Solutions and | VSE vs. Curtiss Wright | VSE vs. National Presto 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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