Correlation Between Huntington Ingalls and Rheinmetall
Can any of the company-specific risk be diversified away by investing in both Huntington Ingalls and Rheinmetall 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 Rheinmetall 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 Rheinmetall AG ADR, you can compare the effects of market volatilities on Huntington Ingalls and Rheinmetall 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 Rheinmetall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Ingalls and Rheinmetall.
Diversification Opportunities for Huntington Ingalls and Rheinmetall
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huntington and Rheinmetall is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Ingalls Industries and Rheinmetall AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rheinmetall AG ADR 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 Rheinmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rheinmetall AG ADR has no effect on the direction of Huntington Ingalls i.e., Huntington Ingalls and Rheinmetall go up and down completely randomly.
Pair Corralation between Huntington Ingalls and Rheinmetall
Considering the 90-day investment horizon Huntington Ingalls Industries is expected to under-perform the Rheinmetall. In addition to that, Huntington Ingalls is 1.24 times more volatile than Rheinmetall AG ADR. It trades about -0.05 of its total potential returns per unit of risk. Rheinmetall AG ADR is currently generating about 0.06 per unit of volatility. If you would invest 11,249 in Rheinmetall AG ADR on August 28, 2024 and sell it today you would earn a total of 1,636 from holding Rheinmetall AG ADR or generate 14.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Huntington Ingalls Industries vs. Rheinmetall AG ADR
Performance |
| Timeline |
| Huntington Ingalls |
| Rheinmetall AG ADR |
Huntington Ingalls and Rheinmetall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntington Ingalls and Rheinmetall
The main advantage of trading using opposite Huntington Ingalls and Rheinmetall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Ingalls position performs unexpectedly, Rheinmetall 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 Rheinmetall will offset losses from the drop in Rheinmetall's long position.| Huntington Ingalls vs. Sidus Space | Huntington Ingalls vs. Rocket Lab USA | Huntington Ingalls vs. Momentus | Huntington Ingalls vs. Planet Labs PBC |
| Rheinmetall vs. Moog Inc | Rheinmetall vs. BAE Systems PLC | Rheinmetall vs. Park Electrochemical | Rheinmetall vs. Triumph Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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