Correlation Between Sturm Ruger and Ammo
Can any of the company-specific risk be diversified away by investing in both Sturm Ruger and Ammo 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 Sturm Ruger and Ammo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sturm Ruger and Ammo Inc, you can compare the effects of market volatilities on Sturm Ruger and Ammo 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 Sturm Ruger with a short position of Ammo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sturm Ruger and Ammo.
Diversification Opportunities for Sturm Ruger and Ammo
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sturm and Ammo is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sturm Ruger and Ammo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ammo Inc and Sturm Ruger 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 Sturm Ruger are associated (or correlated) with Ammo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ammo Inc has no effect on the direction of Sturm Ruger i.e., Sturm Ruger and Ammo go up and down completely randomly.
Pair Corralation between Sturm Ruger and Ammo
Considering the 90-day investment horizon Sturm Ruger is expected to generate 15.59 times less return on investment than Ammo. But when comparing it to its historical volatility, Sturm Ruger is 4.39 times less risky than Ammo. It trades about 0.1 of its potential returns per unit of risk. Ammo Inc is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Ammo Inc on November 9, 2024 and sell it today you would earn a total of 47.00 from holding Ammo Inc or generate 36.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sturm Ruger vs. Ammo Inc
Performance |
| Timeline |
| Sturm Ruger |
| Ammo Inc |
Sturm Ruger and Ammo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sturm Ruger and Ammo
The main advantage of trading using opposite Sturm Ruger and Ammo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sturm Ruger position performs unexpectedly, Ammo 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 Ammo will offset losses from the drop in Ammo's long position.| Sturm Ruger vs. Ammo Inc | Sturm Ruger vs. Kratos Defense Security | Sturm Ruger vs. VSE Corporation | Sturm Ruger vs. Ammo Preferred |
| Ammo vs. Sturm Ruger | Ammo vs. Kratos Defense Security | Ammo vs. VSE Corporation | Ammo vs. Smith Wesson Brands |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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