Correlation Between General Dynamics and Astronics
Can any of the company-specific risk be diversified away by investing in both General Dynamics 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 General Dynamics and Astronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Dynamics and Astronics, you can compare the effects of market volatilities on General Dynamics 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 General Dynamics with a short position of Astronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Dynamics and Astronics.
Diversification Opportunities for General Dynamics and Astronics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between General and Astronics is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and Astronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics and General Dynamics 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 General Dynamics 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 General Dynamics i.e., General Dynamics and Astronics go up and down completely randomly.
Pair Corralation between General Dynamics and Astronics
Allowing for the 90-day total investment horizon General Dynamics is expected to under-perform the Astronics. But the stock apears to be less risky and, when comparing its historical volatility, General Dynamics is 1.11 times less risky than Astronics. The stock trades about -0.03 of its potential returns per unit of risk. The Astronics is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,579 in Astronics on November 2, 2024 and sell it today you would earn a total of 196.00 from holding Astronics or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Dynamics vs. Astronics
Performance |
| Timeline |
| General Dynamics |
| Astronics |
General Dynamics and Astronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Dynamics and Astronics
The main advantage of trading using opposite General Dynamics and Astronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Dynamics 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.| General Dynamics vs. Lockheed Martin | General Dynamics vs. Raytheon Technologies Corp | General Dynamics vs. L3Harris Technologies | General Dynamics vs. Huntington Ingalls Industries |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |