Correlation Between HEICO and Planet Labs
Can any of the company-specific risk be diversified away by investing in both HEICO and Planet Labs 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 HEICO and Planet Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEICO and Planet Labs PBC, you can compare the effects of market volatilities on HEICO and Planet Labs 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 HEICO with a short position of Planet Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEICO and Planet Labs.
Diversification Opportunities for HEICO and Planet Labs
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HEICO and Planet is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding HEICO and Planet Labs PBC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Labs PBC and HEICO 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 HEICO are associated (or correlated) with Planet Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Labs PBC has no effect on the direction of HEICO i.e., HEICO and Planet Labs go up and down completely randomly.
Pair Corralation between HEICO and Planet Labs
Assuming the 90 days horizon HEICO is expected to generate 1.08 times less return on investment than Planet Labs. But when comparing it to its historical volatility, HEICO is 2.97 times less risky than Planet Labs. It trades about 0.07 of its potential returns per unit of risk. Planet Labs PBC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 320.00 in Planet Labs PBC on January 10, 2025 and sell it today you would earn a total of 16.00 from holding Planet Labs PBC or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEICO vs. Planet Labs PBC
Performance |
| Timeline |
| HEICO |
| Planet Labs PBC |
HEICO and Planet Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEICO and Planet Labs
The main advantage of trading using opposite HEICO and Planet Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEICO position performs unexpectedly, Planet Labs 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 Planet Labs will offset losses from the drop in Planet Labs' long position.| HEICO vs. Vertical Aerospace | HEICO vs. Rolls Royce Holdings plc | HEICO vs. Embraer SA ADR | HEICO vs. Rocket Lab USA |
| Planet Labs vs. Virgin Galactic Holdings | Planet Labs vs. Eve Holding | Planet Labs vs. Redwire Corp | Planet Labs vs. Momentus |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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