Correlation Between Astronics and Ducommun Incorporated
Can any of the company-specific risk be diversified away by investing in both Astronics and Ducommun Incorporated 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 Ducommun Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astronics and Ducommun Incorporated, you can compare the effects of market volatilities on Astronics and Ducommun Incorporated 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 Ducommun Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astronics and Ducommun Incorporated.
Diversification Opportunities for Astronics and Ducommun Incorporated
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astronics and Ducommun is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Astronics and Ducommun Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducommun Incorporated 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 Ducommun Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducommun Incorporated has no effect on the direction of Astronics i.e., Astronics and Ducommun Incorporated go up and down completely randomly.
Pair Corralation between Astronics and Ducommun Incorporated
Given the investment horizon of 90 days Astronics is expected to under-perform the Ducommun Incorporated. In addition to that, Astronics is 1.96 times more volatile than Ducommun Incorporated. It trades about -0.07 of its total potential returns per unit of risk. Ducommun Incorporated is currently generating about 0.1 per unit of volatility. If you would invest 6,231 in Ducommun Incorporated on August 23, 2024 and sell it today you would earn a total of 284.00 from holding Ducommun Incorporated or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astronics vs. Ducommun Incorporated
Performance |
| Timeline |
| Astronics |
| Ducommun Incorporated |
Astronics and Ducommun Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astronics and Ducommun Incorporated
The main advantage of trading using opposite Astronics and Ducommun Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astronics position performs unexpectedly, Ducommun Incorporated 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 Ducommun Incorporated will offset losses from the drop in Ducommun Incorporated's long position.| Astronics vs. Ducommun Incorporated | Astronics vs. Innovative Solutions and | Astronics vs. National Presto Industries | Astronics vs. Park Electrochemical |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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