Correlation Between Redwire Corp and Aerojet Rocketdyne
Can any of the company-specific risk be diversified away by investing in both Redwire Corp 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 Redwire Corp and Aerojet Rocketdyne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redwire Corp and Aerojet Rocketdyne Holdings, you can compare the effects of market volatilities on Redwire Corp 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 Redwire Corp with a short position of Aerojet Rocketdyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redwire Corp and Aerojet Rocketdyne.
Diversification Opportunities for Redwire Corp and Aerojet Rocketdyne
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Redwire and Aerojet is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Redwire Corp and Aerojet Rocketdyne Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerojet Rocketdyne and Redwire Corp 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 Redwire Corp 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 Redwire Corp i.e., Redwire Corp and Aerojet Rocketdyne go up and down completely randomly.
Pair Corralation between Redwire Corp and Aerojet Rocketdyne
If you would invest 687.00 in Redwire Corp on August 30, 2024 and sell it today you would earn a total of 662.00 from holding Redwire Corp or generate 96.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.27% |
| Values | Daily Returns |
Redwire Corp vs. Aerojet Rocketdyne Holdings
Performance |
| Timeline |
| Redwire Corp |
| Aerojet Rocketdyne |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Redwire Corp and Aerojet Rocketdyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redwire Corp and Aerojet Rocketdyne
The main advantage of trading using opposite Redwire Corp and Aerojet Rocketdyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redwire Corp 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.| Redwire Corp vs. Sidus Space | Redwire Corp vs. Planet Labs PBC | Redwire Corp vs. Intuitive Machines | Redwire Corp vs. Rocket Lab USA |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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