Correlation Between Astronics and Eve Holding
Can any of the company-specific risk be diversified away by investing in both Astronics and Eve Holding 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 Eve Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astronics and Eve Holding, you can compare the effects of market volatilities on Astronics and Eve Holding 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 Eve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astronics and Eve Holding.
Diversification Opportunities for Astronics and Eve Holding
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astronics and Eve is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Astronics and Eve Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eve Holding 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 Eve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eve Holding has no effect on the direction of Astronics i.e., Astronics and Eve Holding go up and down completely randomly.
Pair Corralation between Astronics and Eve Holding
Given the investment horizon of 90 days Astronics is expected to under-perform the Eve Holding. In addition to that, Astronics is 1.1 times more volatile than Eve Holding. It trades about -0.03 of its total potential returns per unit of risk. Eve Holding is currently generating about 0.0 per unit of volatility. If you would invest 340.00 in Eve Holding on August 25, 2024 and sell it today you would lose (5.00) from holding Eve Holding or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astronics vs. Eve Holding
Performance |
| Timeline |
| Astronics |
| Eve Holding |
Astronics and Eve Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astronics and Eve Holding
The main advantage of trading using opposite Astronics and Eve Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astronics position performs unexpectedly, Eve Holding 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 Eve Holding will offset losses from the drop in Eve Holding's long position.| Astronics vs. Ducommun Incorporated | Astronics vs. Innovative Solutions and | Astronics vs. National Presto Industries | Astronics vs. Park Electrochemical |
| Eve Holding vs. Heico | Eve Holding vs. Mercury Systems | Eve Holding vs. AeroVironment | Eve Holding vs. Howmet Aerospace |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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