Correlation Between Howmet Aerospace and Sky Harbour
Can any of the company-specific risk be diversified away by investing in both Howmet Aerospace and Sky Harbour 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 Howmet Aerospace and Sky Harbour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Howmet Aerospace and Sky Harbour Group, you can compare the effects of market volatilities on Howmet Aerospace and Sky Harbour 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 Howmet Aerospace with a short position of Sky Harbour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Howmet Aerospace and Sky Harbour.
Diversification Opportunities for Howmet Aerospace and Sky Harbour
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Howmet and Sky is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Howmet Aerospace and Sky Harbour Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky Harbour Group and Howmet Aerospace 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 Howmet Aerospace are associated (or correlated) with Sky Harbour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky Harbour Group has no effect on the direction of Howmet Aerospace i.e., Howmet Aerospace and Sky Harbour go up and down completely randomly.
Pair Corralation between Howmet Aerospace and Sky Harbour
Considering the 90-day investment horizon Howmet Aerospace is expected to generate 1.53 times less return on investment than Sky Harbour. But when comparing it to its historical volatility, Howmet Aerospace is 2.55 times less risky than Sky Harbour. It trades about 0.13 of its potential returns per unit of risk. Sky Harbour Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 298.00 in Sky Harbour Group on August 29, 2024 and sell it today you would earn a total of 850.00 from holding Sky Harbour Group or generate 285.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Howmet Aerospace vs. Sky Harbour Group
Performance |
| Timeline |
| Howmet Aerospace |
| Sky Harbour Group |
Howmet Aerospace and Sky Harbour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Howmet Aerospace and Sky Harbour
The main advantage of trading using opposite Howmet Aerospace and Sky Harbour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Howmet Aerospace position performs unexpectedly, Sky Harbour 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 Sky Harbour will offset losses from the drop in Sky Harbour's long position.| Howmet Aerospace vs. Curtiss Wright | Howmet Aerospace vs. Mercury Systems | Howmet Aerospace vs. AAR Corp | Howmet Aerospace vs. Ducommun Incorporated |
| Sky Harbour vs. Ducommun Incorporated | Sky Harbour vs. Innovative Solutions and | Sky Harbour vs. National Presto Industries | Sky Harbour vs. Astronics |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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