Correlation Between CPI Aerostructures and Huntington Ingalls
Can any of the company-specific risk be diversified away by investing in both CPI Aerostructures and Huntington Ingalls 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 Huntington Ingalls into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPI Aerostructures and Huntington Ingalls Industries, you can compare the effects of market volatilities on CPI Aerostructures and Huntington Ingalls 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 Huntington Ingalls. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Aerostructures and Huntington Ingalls.
Diversification Opportunities for CPI Aerostructures and Huntington Ingalls
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CPI and Huntington is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CPI Aerostructures and Huntington Ingalls Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Ingalls 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 Huntington Ingalls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntington Ingalls has no effect on the direction of CPI Aerostructures i.e., CPI Aerostructures and Huntington Ingalls go up and down completely randomly.
Pair Corralation between CPI Aerostructures and Huntington Ingalls
Considering the 90-day investment horizon CPI Aerostructures is expected to generate 1.75 times more return on investment than Huntington Ingalls. However, CPI Aerostructures is 1.75 times more volatile than Huntington Ingalls Industries. It trades about 0.02 of its potential returns per unit of risk. Huntington Ingalls Industries is currently generating about 0.0 per unit of risk. If you would invest 364.00 in CPI Aerostructures on August 26, 2024 and sell it today you would earn a total of 10.00 from holding CPI Aerostructures or generate 2.75% 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. Huntington Ingalls Industries
Performance |
| Timeline |
| CPI Aerostructures |
| Huntington Ingalls |
CPI Aerostructures and Huntington Ingalls Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPI Aerostructures and Huntington Ingalls
The main advantage of trading using opposite CPI Aerostructures and Huntington Ingalls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPI Aerostructures position performs unexpectedly, Huntington Ingalls 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 Huntington Ingalls will offset losses from the drop in Huntington Ingalls' long position.| CPI Aerostructures vs. Redwire Corp | CPI Aerostructures vs. Sidus Space | CPI Aerostructures vs. Rocket Lab USA | CPI Aerostructures vs. Momentus |
| Huntington Ingalls vs. Lockheed Martin | Huntington Ingalls vs. General Dynamics | Huntington Ingalls vs. Raytheon Technologies Corp | Huntington Ingalls vs. L3Harris Technologies |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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