Correlation Between CPI Aerostructures and Thales SA
Can any of the company-specific risk be diversified away by investing in both CPI Aerostructures and Thales SA 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 Thales SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPI Aerostructures and Thales SA, you can compare the effects of market volatilities on CPI Aerostructures and Thales SA 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 Thales SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Aerostructures and Thales SA.
Diversification Opportunities for CPI Aerostructures and Thales SA
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CPI and Thales is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CPI Aerostructures and Thales SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales SA 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 Thales SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales SA has no effect on the direction of CPI Aerostructures i.e., CPI Aerostructures and Thales SA go up and down completely randomly.
Pair Corralation between CPI Aerostructures and Thales SA
Considering the 90-day investment horizon CPI Aerostructures is expected to generate 2.64 times more return on investment than Thales SA. However, CPI Aerostructures is 2.64 times more volatile than Thales SA. It trades about 0.08 of its potential returns per unit of risk. Thales SA is currently generating about -0.11 per unit of risk. If you would invest 344.00 in CPI Aerostructures on August 29, 2024 and sell it today you would earn a total of 34.00 from holding CPI Aerostructures or generate 9.88% 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. Thales SA
Performance |
| Timeline |
| CPI Aerostructures |
| Thales SA |
CPI Aerostructures and Thales SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPI Aerostructures and Thales SA
The main advantage of trading using opposite CPI Aerostructures and Thales SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPI Aerostructures position performs unexpectedly, Thales SA 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 Thales SA will offset losses from the drop in Thales SA's long position.| CPI Aerostructures vs. ABIVAX Socit Anonyme | CPI Aerostructures vs. Morningstar Unconstrained Allocation | CPI Aerostructures vs. SPACE | CPI Aerostructures vs. Knife River |
| Thales SA vs. MTU Aero Engines | Thales SA vs. Singapore Technologies Engineering | Thales SA vs. Safran SA | Thales SA vs. Thales SA ADR |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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