Correlation Between General Dynamics and Astronics Corp
Can any of the company-specific risk be diversified away by investing in both General Dynamics and Astronics Corp 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 Corp 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 Corp Cl, you can compare the effects of market volatilities on General Dynamics and Astronics Corp 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 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Dynamics and Astronics Corp.
Diversification Opportunities for General Dynamics and Astronics Corp
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between General and Astronics is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and Astronics Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics Corp Cl 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 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics Corp Cl has no effect on the direction of General Dynamics i.e., General Dynamics and Astronics Corp go up and down completely randomly.
Pair Corralation between General Dynamics and Astronics Corp
Allowing for the 90-day total investment horizon General Dynamics is expected to under-perform the Astronics Corp. But the stock apears to be less risky and, when comparing its historical volatility, General Dynamics is 2.02 times less risky than Astronics Corp. The stock trades about -0.02 of its potential returns per unit of risk. The Astronics Corp Cl is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,607 in Astronics Corp Cl on November 3, 2024 and sell it today you would earn a total of 69.00 from holding Astronics Corp Cl or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Dynamics vs. Astronics Corp Cl
Performance |
| Timeline |
| General Dynamics |
| Astronics Corp Cl |
General Dynamics and Astronics Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Dynamics and Astronics Corp
The main advantage of trading using opposite General Dynamics and Astronics Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Dynamics position performs unexpectedly, Astronics Corp 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 Corp will offset losses from the drop in Astronics Corp's 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 Corp vs. Firan Technology Group | Astronics Corp vs. 808 Renewable Energy | Astronics Corp vs. Park Electrochemical | Astronics Corp vs. Innovative Solutions and |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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