Correlation Between Terran Orbital and General Dynamics
Can any of the company-specific risk be diversified away by investing in both Terran Orbital and General Dynamics 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 Terran Orbital and General Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terran Orbital Corp and General Dynamics, you can compare the effects of market volatilities on Terran Orbital and General Dynamics 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 Terran Orbital with a short position of General Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terran Orbital and General Dynamics.
Diversification Opportunities for Terran Orbital and General Dynamics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Terran and General is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Terran Orbital Corp and General Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Dynamics and Terran Orbital 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 Terran Orbital Corp are associated (or correlated) with General Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Dynamics has no effect on the direction of Terran Orbital i.e., Terran Orbital and General Dynamics go up and down completely randomly.
Pair Corralation between Terran Orbital and General Dynamics
If you would invest 25.00 in Terran Orbital Corp on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Terran Orbital Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 14.29% |
| Values | Daily Returns |
Terran Orbital Corp vs. General Dynamics
Performance |
| Timeline |
| Terran Orbital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| General Dynamics |
Terran Orbital and General Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terran Orbital and General Dynamics
The main advantage of trading using opposite Terran Orbital and General Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terran Orbital position performs unexpectedly, General Dynamics 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 General Dynamics will offset losses from the drop in General Dynamics' long position.| Terran Orbital vs. Intuitive Machines | Terran Orbital vs. Sidus Space | Terran Orbital vs. Redwire Corp | Terran Orbital vs. Rocket Lab USA |
| General Dynamics vs. Redwire Corp | General Dynamics vs. Sidus Space | General Dynamics vs. Rocket Lab USA | General Dynamics 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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