Correlation Between Astronics and Safran SA
Can any of the company-specific risk be diversified away by investing in both Astronics and Safran SA 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 Safran SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astronics and Safran SA, you can compare the effects of market volatilities on Astronics and Safran SA 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 Safran SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astronics and Safran SA.
Diversification Opportunities for Astronics and Safran SA
Very good diversification
The 3 months correlation between Astronics and Safran is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Astronics and Safran SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safran SA 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 Safran SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safran SA has no effect on the direction of Astronics i.e., Astronics and Safran SA go up and down completely randomly.
Pair Corralation between Astronics and Safran SA
Given the investment horizon of 90 days Astronics is expected to under-perform the Safran SA. In addition to that, Astronics is 3.2 times more volatile than Safran SA. It trades about -0.13 of its total potential returns per unit of risk. Safran SA is currently generating about 0.02 per unit of volatility. If you would invest 5,716 in Safran SA on August 29, 2024 and sell it today you would earn a total of 17.00 from holding Safran SA or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astronics vs. Safran SA
Performance |
| Timeline |
| Astronics |
| Safran SA |
Astronics and Safran SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astronics and Safran SA
The main advantage of trading using opposite Astronics and Safran SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astronics position performs unexpectedly, Safran SA 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 Safran SA will offset losses from the drop in Safran SA's long position.| Astronics vs. Sidus Space | Astronics vs. Rocket Lab USA | Astronics vs. Momentus | Astronics vs. Planet Labs PBC |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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