Correlation Between Hexcel and Ammo
Can any of the company-specific risk be diversified away by investing in both Hexcel and Ammo 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 Hexcel and Ammo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexcel and Ammo Inc, you can compare the effects of market volatilities on Hexcel and Ammo 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 Hexcel with a short position of Ammo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexcel and Ammo.
Diversification Opportunities for Hexcel and Ammo
Modest diversification
The 3 months correlation between Hexcel and Ammo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hexcel and Ammo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ammo Inc and Hexcel 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 Hexcel are associated (or correlated) with Ammo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ammo Inc has no effect on the direction of Hexcel i.e., Hexcel and Ammo go up and down completely randomly.
Pair Corralation between Hexcel and Ammo
Considering the 90-day investment horizon Hexcel is expected to under-perform the Ammo. But the stock apears to be less risky and, when comparing its historical volatility, Hexcel is 2.68 times less risky than Ammo. The stock trades about -0.02 of its potential returns per unit of risk. The Ammo Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 121.00 in Ammo Inc on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Ammo Inc or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexcel vs. Ammo Inc
Performance |
| Timeline |
| Hexcel |
| Ammo Inc |
Hexcel and Ammo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexcel and Ammo
The main advantage of trading using opposite Hexcel and Ammo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexcel position performs unexpectedly, Ammo 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 Ammo will offset losses from the drop in Ammo's long position.The idea behind Hexcel and Ammo Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ammo vs. Sturm Ruger | Ammo vs. Kratos Defense Security | Ammo vs. VSE Corporation | Ammo vs. Smith Wesson Brands |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |