Correlation Between Amentum Holdings and China Aircraft
Can any of the company-specific risk be diversified away by investing in both Amentum Holdings and China Aircraft 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 Amentum Holdings and China Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amentum Holdings and China Aircraft Leasing, you can compare the effects of market volatilities on Amentum Holdings and China Aircraft 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 Amentum Holdings with a short position of China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amentum Holdings and China Aircraft.
Diversification Opportunities for Amentum Holdings and China Aircraft
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amentum and China is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Amentum Holdings and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing and Amentum Holdings 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 Amentum Holdings are associated (or correlated) with China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of Amentum Holdings i.e., Amentum Holdings and China Aircraft go up and down completely randomly.
Pair Corralation between Amentum Holdings and China Aircraft
Given the investment horizon of 90 days Amentum Holdings is expected to under-perform the China Aircraft. In addition to that, Amentum Holdings is 1.51 times more volatile than China Aircraft Leasing. It trades about -0.04 of its total potential returns per unit of risk. China Aircraft Leasing is currently generating about 0.07 per unit of volatility. If you would invest 19.00 in China Aircraft Leasing on August 26, 2024 and sell it today you would earn a total of 21.00 from holding China Aircraft Leasing or generate 110.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 13.51% |
| Values | Daily Returns |
Amentum Holdings vs. China Aircraft Leasing
Performance |
| Timeline |
| Amentum Holdings |
| China Aircraft Leasing |
Amentum Holdings and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amentum Holdings and China Aircraft
The main advantage of trading using opposite Amentum Holdings and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amentum Holdings position performs unexpectedly, China Aircraft 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 China Aircraft will offset losses from the drop in China Aircraft's long position.| Amentum Holdings vs. China Aircraft Leasing | Amentum Holdings vs. Academy Sports Outdoors | Amentum Holdings vs. Willscot Mobile Mini | Amentum Holdings vs. Hertz Global Holdings |
| China Aircraft vs. Patterson UTI Energy | China Aircraft vs. BioNTech SE | China Aircraft vs. Helmerich and Payne | China Aircraft vs. Sellas Life Sciences |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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