Correlation Between Park Electrochemical and AeroCentury Corp
Can any of the company-specific risk be diversified away by investing in both Park Electrochemical and AeroCentury Corp 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 Park Electrochemical and AeroCentury Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Electrochemical and AeroCentury Corp, you can compare the effects of market volatilities on Park Electrochemical and AeroCentury Corp 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 Park Electrochemical with a short position of AeroCentury Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Electrochemical and AeroCentury Corp.
Diversification Opportunities for Park Electrochemical and AeroCentury Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Park and AeroCentury is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Park Electrochemical and AeroCentury Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroCentury Corp and Park Electrochemical 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 Park Electrochemical are associated (or correlated) with AeroCentury Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroCentury Corp has no effect on the direction of Park Electrochemical i.e., Park Electrochemical and AeroCentury Corp go up and down completely randomly.
Pair Corralation between Park Electrochemical and AeroCentury Corp
If you would invest 1,412 in Park Electrochemical on October 20, 2024 and sell it today you would earn a total of 55.00 from holding Park Electrochemical or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Park Electrochemical vs. AeroCentury Corp
Performance |
| Timeline |
| Park Electrochemical |
| AeroCentury Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Park Electrochemical and AeroCentury Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Electrochemical and AeroCentury Corp
The main advantage of trading using opposite Park Electrochemical and AeroCentury Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Electrochemical position performs unexpectedly, AeroCentury Corp 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 AeroCentury Corp will offset losses from the drop in AeroCentury Corp's long position.| Park Electrochemical vs. Innovative Solutions and | Park Electrochemical vs. VSE Corporation | Park Electrochemical vs. Curtiss Wright | Park Electrochemical vs. Ducommun Incorporated |
| AeroCentury Corp vs. Space Communication | AeroCentury Corp vs. Stratasys | AeroCentury Corp vs. Weibo Corp | AeroCentury Corp vs. Iridium Communications |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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