Correlation Between SIFCO Industries and Astrotech Corp
Can any of the company-specific risk be diversified away by investing in both SIFCO Industries and Astrotech 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 SIFCO Industries and Astrotech Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIFCO Industries and Astrotech Corp, you can compare the effects of market volatilities on SIFCO Industries and Astrotech 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 SIFCO Industries with a short position of Astrotech Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIFCO Industries and Astrotech Corp.
Diversification Opportunities for SIFCO Industries and Astrotech Corp
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SIFCO and Astrotech is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SIFCO Industries and Astrotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astrotech Corp and SIFCO Industries 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 SIFCO Industries are associated (or correlated) with Astrotech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astrotech Corp has no effect on the direction of SIFCO Industries i.e., SIFCO Industries and Astrotech Corp go up and down completely randomly.
Pair Corralation between SIFCO Industries and Astrotech Corp
Considering the 90-day investment horizon SIFCO Industries is expected to under-perform the Astrotech Corp. But the stock apears to be less risky and, when comparing its historical volatility, SIFCO Industries is 1.09 times less risky than Astrotech Corp. The stock trades about -0.03 of its potential returns per unit of risk. The Astrotech Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 767.00 in Astrotech Corp on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Astrotech Corp or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIFCO Industries vs. Astrotech Corp
Performance |
| Timeline |
| SIFCO Industries |
| Astrotech Corp |
SIFCO Industries and Astrotech Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIFCO Industries and Astrotech Corp
The main advantage of trading using opposite SIFCO Industries and Astrotech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIFCO Industries position performs unexpectedly, Astrotech 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 Astrotech Corp will offset losses from the drop in Astrotech Corp's long position.| SIFCO Industries vs. Ducommun Incorporated | SIFCO Industries vs. Park Electrochemical | SIFCO Industries vs. National Presto Industries | SIFCO Industries vs. Astronics |
| Astrotech Corp vs. CPI Aerostructures | Astrotech Corp vs. Tat Techno | Astrotech Corp vs. SIFCO Industries | Astrotech Corp vs. Park Electrochemical |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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