Correlation Between Huntington Ingalls and Redwire Corp
Can any of the company-specific risk be diversified away by investing in both Huntington Ingalls and Redwire 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 Huntington Ingalls and Redwire Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntington Ingalls Industries and Redwire Corp, you can compare the effects of market volatilities on Huntington Ingalls and Redwire 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 Huntington Ingalls with a short position of Redwire Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Ingalls and Redwire Corp.
Diversification Opportunities for Huntington Ingalls and Redwire Corp
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Huntington and Redwire is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Ingalls Industries and Redwire Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redwire Corp and Huntington Ingalls 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 Huntington Ingalls Industries are associated (or correlated) with Redwire Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redwire Corp has no effect on the direction of Huntington Ingalls i.e., Huntington Ingalls and Redwire Corp go up and down completely randomly.
Pair Corralation between Huntington Ingalls and Redwire Corp
Considering the 90-day investment horizon Huntington Ingalls Industries is expected to under-perform the Redwire Corp. But the stock apears to be less risky and, when comparing its historical volatility, Huntington Ingalls Industries is 1.8 times less risky than Redwire Corp. The stock trades about -0.06 of its potential returns per unit of risk. The Redwire Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 517.00 in Redwire Corp on August 24, 2024 and sell it today you would earn a total of 651.00 from holding Redwire Corp or generate 125.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Huntington Ingalls Industries vs. Redwire Corp
Performance |
| Timeline |
| Huntington Ingalls |
| Redwire Corp |
Huntington Ingalls and Redwire Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Ingalls and Redwire Corp
The main advantage of trading using opposite Huntington Ingalls and Redwire Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Ingalls position performs unexpectedly, Redwire 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 Redwire Corp will offset losses from the drop in Redwire Corp's long position.| Huntington Ingalls vs. Lockheed Martin | Huntington Ingalls vs. Raytheon Technologies Corp | Huntington Ingalls vs. L3Harris Technologies | Huntington Ingalls vs. Northrop Grumman |
| Redwire Corp vs. Sidus Space | Redwire Corp vs. Planet Labs PBC | Redwire Corp vs. Intuitive Machines | Redwire Corp vs. Rocket Lab USA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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