Correlation Between Sky Harbour and CPI Aerostructures
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
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sky and CPI is 0.07. 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 2.39 times less risky than CPI Aerostructures. The stock trades about -0.32 of its potential returns per unit of risk. The CPI Aerostructures is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 386.00 in CPI Aerostructures on October 23, 2024 and sell it today you would earn a total of 113.00 from holding CPI Aerostructures or generate 29.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sky Harbour Group vs. CPI Aerostructures
Performance |
| Timeline |
| Sky Harbour Group |
| CPI Aerostructures |
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.| Sky Harbour vs. Ducommun Incorporated | Sky Harbour vs. Innovative Solutions and | Sky Harbour vs. National Presto Industries | Sky Harbour vs. Astronics |
| CPI Aerostructures vs. Ducommun Incorporated | CPI Aerostructures vs. SIFCO Industries | CPI Aerostructures vs. Innovative Solutions and | CPI Aerostructures vs. Air Industries Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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