Correlation Between CPI Aerostructures and New Horizon
Can any of the company-specific risk be diversified away by investing in both CPI Aerostructures and New Horizon 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 New Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPI Aerostructures and New Horizon Aircraft, you can compare the effects of market volatilities on CPI Aerostructures and New Horizon 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 New Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Aerostructures and New Horizon.
Diversification Opportunities for CPI Aerostructures and New Horizon
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CPI and New is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding CPI Aerostructures and New Horizon Aircraft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Horizon Aircraft 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 New Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Horizon Aircraft has no effect on the direction of CPI Aerostructures i.e., CPI Aerostructures and New Horizon go up and down completely randomly.
Pair Corralation between CPI Aerostructures and New Horizon
Considering the 90-day investment horizon CPI Aerostructures is expected to generate 0.35 times more return on investment than New Horizon. However, CPI Aerostructures is 2.82 times less risky than New Horizon. It trades about 0.03 of its potential returns per unit of risk. New Horizon Aircraft is currently generating about -0.04 per unit of risk. If you would invest 325.00 in CPI Aerostructures on August 28, 2024 and sell it today you would earn a total of 68.00 from holding CPI Aerostructures or generate 20.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.61% |
| Values | Daily Returns |
CPI Aerostructures vs. New Horizon Aircraft
Performance |
| Timeline |
| CPI Aerostructures |
| New Horizon Aircraft |
CPI Aerostructures and New Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPI Aerostructures and New Horizon
The main advantage of trading using opposite CPI Aerostructures and New Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPI Aerostructures position performs unexpectedly, New Horizon 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 New Horizon will offset losses from the drop in New Horizon's long position.| CPI Aerostructures vs. Sidus Space | CPI Aerostructures vs. Rocket Lab USA | CPI Aerostructures vs. Momentus | CPI Aerostructures vs. Planet Labs PBC |
| New Horizon vs. Sidus Space | New Horizon vs. Rocket Lab USA | New Horizon vs. Momentus | New Horizon vs. Planet Labs PBC |
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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