Correlation Between CPI Aerostructures and Astronics
Can any of the company-specific risk be diversified away by investing in both CPI Aerostructures and Astronics 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 Astronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPI Aerostructures and Astronics, you can compare the effects of market volatilities on CPI Aerostructures and Astronics 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 Astronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Aerostructures and Astronics.
Diversification Opportunities for CPI Aerostructures and Astronics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CPI and Astronics is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CPI Aerostructures and Astronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics 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 Astronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics has no effect on the direction of CPI Aerostructures i.e., CPI Aerostructures and Astronics go up and down completely randomly.
Pair Corralation between CPI Aerostructures and Astronics
Considering the 90-day investment horizon CPI Aerostructures is expected to generate 3.51 times less return on investment than Astronics. But when comparing it to its historical volatility, CPI Aerostructures is 1.1 times less risky than Astronics. It trades about 0.02 of its potential returns per unit of risk. Astronics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 900.00 in Astronics on August 25, 2024 and sell it today you would earn a total of 822.00 from holding Astronics or generate 91.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPI Aerostructures vs. Astronics
Performance |
| Timeline |
| CPI Aerostructures |
| Astronics |
CPI Aerostructures and Astronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPI Aerostructures and Astronics
The main advantage of trading using opposite CPI Aerostructures and Astronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPI Aerostructures position performs unexpectedly, Astronics 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 Astronics will offset losses from the drop in Astronics' long position.| CPI Aerostructures vs. Ducommun Incorporated | CPI Aerostructures vs. SIFCO Industries | CPI Aerostructures vs. Innovative Solutions and | CPI Aerostructures vs. Air Industries Group |
| Astronics vs. Ducommun Incorporated | Astronics vs. Innovative Solutions and | Astronics vs. National Presto Industries | Astronics vs. Park Electrochemical |
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.
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