Correlation Between CPI Aerostructures and Air Industries
Can any of the company-specific risk be diversified away by investing in both CPI Aerostructures and Air Industries 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 CPI Aerostructures and Air Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPI Aerostructures and Air Industries Group, you can compare the effects of market volatilities on CPI Aerostructures and Air Industries 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 CPI Aerostructures with a short position of Air Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Aerostructures and Air Industries.
Diversification Opportunities for CPI Aerostructures and Air Industries
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CPI and Air is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CPI Aerostructures and Air Industries Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Industries Group and CPI Aerostructures 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 CPI Aerostructures are associated (or correlated) with Air Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Industries Group has no effect on the direction of CPI Aerostructures i.e., CPI Aerostructures and Air Industries go up and down completely randomly.
Pair Corralation between CPI Aerostructures and Air Industries
Considering the 90-day investment horizon CPI Aerostructures is expected to generate 0.87 times more return on investment than Air Industries. However, CPI Aerostructures is 1.15 times less risky than Air Industries. It trades about 0.09 of its potential returns per unit of risk. Air Industries Group is currently generating about -0.12 per unit of risk. If you would invest 330.00 in CPI Aerostructures on August 26, 2024 and sell it today you would earn a total of 44.00 from holding CPI Aerostructures or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPI Aerostructures vs. Air Industries Group
Performance |
| Timeline |
| CPI Aerostructures |
| Air Industries Group |
CPI Aerostructures and Air Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPI Aerostructures and Air Industries
The main advantage of trading using opposite CPI Aerostructures and Air Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPI Aerostructures position performs unexpectedly, Air Industries 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 Air Industries will offset losses from the drop in Air Industries' long position.| CPI Aerostructures vs. Redwire Corp | CPI Aerostructures vs. Sidus Space | CPI Aerostructures vs. Rocket Lab USA | CPI Aerostructures vs. Momentus |
| Air Industries vs. SIFCO Industries | Air Industries vs. CPI Aerostructures | Air Industries vs. VSE Corporation | Air Industries vs. National Presto Industries |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |