Correlation Between Astronics and CPI Aerostructures
Can any of the company-specific risk be diversified away by investing in both Astronics and CPI Aerostructures 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 Astronics and CPI Aerostructures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astronics and CPI Aerostructures, you can compare the effects of market volatilities on Astronics and CPI Aerostructures 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 Astronics with a short position of CPI Aerostructures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astronics and CPI Aerostructures.
Diversification Opportunities for Astronics and CPI Aerostructures
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astronics and CPI is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Astronics and CPI Aerostructures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPI Aerostructures and Astronics 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 Astronics are associated (or correlated) with CPI Aerostructures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPI Aerostructures has no effect on the direction of Astronics i.e., Astronics and CPI Aerostructures go up and down completely randomly.
Pair Corralation between Astronics and CPI Aerostructures
Given the investment horizon of 90 days Astronics is expected to under-perform the CPI Aerostructures. In addition to that, Astronics is 1.03 times more volatile than CPI Aerostructures. It trades about -0.11 of its total potential returns per unit of risk. CPI Aerostructures is currently generating about 0.08 per unit of volatility. If you would invest 344.00 in CPI Aerostructures on August 29, 2024 and sell it today you would earn a total of 34.00 from holding CPI Aerostructures or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Astronics vs. CPI Aerostructures
Performance |
| Timeline |
| Astronics |
| CPI Aerostructures |
Astronics and CPI Aerostructures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astronics and CPI Aerostructures
The main advantage of trading using opposite Astronics and CPI Aerostructures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astronics position performs unexpectedly, CPI Aerostructures 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 CPI Aerostructures will offset losses from the drop in CPI Aerostructures' long position.| Astronics vs. Ducommun Incorporated | Astronics vs. Innovative Solutions and | Astronics vs. National Presto Industries | Astronics vs. Park Electrochemical |
| CPI Aerostructures vs. ABIVAX Socit Anonyme | CPI Aerostructures vs. Morningstar Unconstrained Allocation | CPI Aerostructures vs. SPACE | CPI Aerostructures vs. Knife River |
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.
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