Correlation Between Sky Harbour and CPI Aerostructures

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Can any of the company-specific risk be diversified away by investing in both Sky Harbour and CPI Aerostructures 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 Sky Harbour and CPI Aerostructures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Harbour Group and CPI Aerostructures, you can compare the effects of market volatilities on Sky Harbour and CPI Aerostructures 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 Sky Harbour with a short position of CPI Aerostructures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Harbour and CPI Aerostructures.

Diversification Opportunities for Sky Harbour and CPI Aerostructures

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sky and CPI is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sky Harbour Group and CPI Aerostructures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPI Aerostructures and Sky Harbour 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 Sky Harbour Group are associated (or correlated) with CPI Aerostructures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPI Aerostructures has no effect on the direction of Sky Harbour i.e., Sky Harbour and CPI Aerostructures go up and down completely randomly.

Pair Corralation between Sky Harbour and CPI Aerostructures

Given the investment horizon of 90 days Sky Harbour Group is expected to under-perform the CPI Aerostructures. But the stock apears to be less risky and, when comparing its historical volatility, Sky Harbour Group is 1.2 times less risky than CPI Aerostructures. The stock trades about -0.08 of its potential returns per unit of risk. The CPI Aerostructures is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  340.00  in CPI Aerostructures on August 25, 2024 and sell it today you would earn a total of  28.00  from holding CPI Aerostructures or generate 8.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sky Harbour Group  vs.  CPI Aerostructures

 Performance 
       Timeline  
Sky Harbour Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sky Harbour Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Sky Harbour is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
CPI Aerostructures 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in CPI Aerostructures are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, CPI Aerostructures unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sky Harbour and CPI Aerostructures Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sky Harbour and CPI Aerostructures

The main advantage of trading using opposite Sky Harbour and CPI Aerostructures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Harbour position performs unexpectedly, CPI Aerostructures 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 CPI Aerostructures will offset losses from the drop in CPI Aerostructures' long position.
The idea behind Sky Harbour Group and CPI Aerostructures pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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