Correlation Between Astronics Corp and Austal
Can any of the company-specific risk be diversified away by investing in both Astronics Corp and Austal 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 Corp and Austal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astronics Corp Cl and Austal Limited, you can compare the effects of market volatilities on Astronics Corp and Austal 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 Corp with a short position of Austal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astronics Corp and Austal.
Diversification Opportunities for Astronics Corp and Austal
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Astronics and Austal is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Astronics Corp Cl and Austal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austal Limited and Astronics Corp 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 Corp Cl are associated (or correlated) with Austal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austal Limited has no effect on the direction of Astronics Corp i.e., Astronics Corp and Austal go up and down completely randomly.
Pair Corralation between Astronics Corp and Austal
Assuming the 90 days horizon Astronics Corp is expected to generate 1.72 times less return on investment than Austal. In addition to that, Astronics Corp is 1.09 times more volatile than Austal Limited. It trades about 0.04 of its total potential returns per unit of risk. Austal Limited is currently generating about 0.08 per unit of volatility. If you would invest 103.00 in Austal Limited on August 26, 2024 and sell it today you would earn a total of 97.00 from holding Austal Limited or generate 94.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.04% |
| Values | Daily Returns |
Astronics Corp Cl vs. Austal Limited
Performance |
| Timeline |
| Astronics Corp Cl |
| Austal Limited |
Astronics Corp and Austal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astronics Corp and Austal
The main advantage of trading using opposite Astronics Corp and Austal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astronics Corp position performs unexpectedly, Austal 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 Austal will offset losses from the drop in Austal's long position.| Astronics Corp vs. Firan Technology Group | Astronics Corp vs. 808 Renewable Energy | Astronics Corp vs. Park Electrochemical | Astronics Corp vs. Innovative Solutions and |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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