Correlation Between National Presto and Alabama Aircraft
Can any of the company-specific risk be diversified away by investing in both National Presto and Alabama Aircraft 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 National Presto and Alabama Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Presto Industries and Alabama Aircraft Industries, you can compare the effects of market volatilities on National Presto and Alabama Aircraft 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 National Presto with a short position of Alabama Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Presto and Alabama Aircraft.
Diversification Opportunities for National Presto and Alabama Aircraft
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Alabama is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding National Presto Industries and Alabama Aircraft Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alabama Aircraft Ind and National Presto 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 National Presto Industries are associated (or correlated) with Alabama Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alabama Aircraft Ind has no effect on the direction of National Presto i.e., National Presto and Alabama Aircraft go up and down completely randomly.
Pair Corralation between National Presto and Alabama Aircraft
If you would invest 7,032 in National Presto Industries on August 29, 2024 and sell it today you would earn a total of 826.00 from holding National Presto Industries or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.32% |
| Values | Daily Returns |
National Presto Industries vs. Alabama Aircraft Industries
Performance |
| Timeline |
| National Presto Indu |
| Alabama Aircraft Ind |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
National Presto and Alabama Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Presto and Alabama Aircraft
The main advantage of trading using opposite National Presto and Alabama Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Presto position performs unexpectedly, Alabama Aircraft 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 Alabama Aircraft will offset losses from the drop in Alabama Aircraft's long position.| National Presto vs. Park Electrochemical | National Presto vs. Ducommun Incorporated | National Presto vs. Innovative Solutions and | National Presto vs. VSE Corporation |
| Alabama Aircraft vs. KVH Industries | Alabama Aircraft vs. AerSale Corp | Alabama Aircraft vs. Zedge Inc | Alabama Aircraft vs. BCE Inc |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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