Correlation Between Ammo Preferred and Aerojet Rocketdyne
Can any of the company-specific risk be diversified away by investing in both Ammo Preferred and Aerojet Rocketdyne 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 Ammo Preferred and Aerojet Rocketdyne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ammo Preferred and Aerojet Rocketdyne Holdings, you can compare the effects of market volatilities on Ammo Preferred and Aerojet Rocketdyne 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 Ammo Preferred with a short position of Aerojet Rocketdyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ammo Preferred and Aerojet Rocketdyne.
Diversification Opportunities for Ammo Preferred and Aerojet Rocketdyne
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ammo and Aerojet is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ammo Preferred and Aerojet Rocketdyne Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerojet Rocketdyne and Ammo Preferred 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 Ammo Preferred are associated (or correlated) with Aerojet Rocketdyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerojet Rocketdyne has no effect on the direction of Ammo Preferred i.e., Ammo Preferred and Aerojet Rocketdyne go up and down completely randomly.
Pair Corralation between Ammo Preferred and Aerojet Rocketdyne
If you would invest 1,915 in Ammo Preferred on August 31, 2024 and sell it today you would earn a total of 370.00 from holding Ammo Preferred or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Ammo Preferred vs. Aerojet Rocketdyne Holdings
Performance |
| Timeline |
| Ammo Preferred |
| Aerojet Rocketdyne |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ammo Preferred and Aerojet Rocketdyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ammo Preferred and Aerojet Rocketdyne
The main advantage of trading using opposite Ammo Preferred and Aerojet Rocketdyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ammo Preferred position performs unexpectedly, Aerojet Rocketdyne 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 Aerojet Rocketdyne will offset losses from the drop in Aerojet Rocketdyne's long position.| Ammo Preferred vs. Ammo Inc | Ammo Preferred vs. XOMA Corporation | Ammo Preferred vs. Presidio Property Trust | Ammo Preferred vs. XOMA Corp |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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