Correlation Between Tat Techno and Redwire Corp
Can any of the company-specific risk be diversified away by investing in both Tat Techno and Redwire 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 Tat Techno and Redwire Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tat Techno and Redwire Corp, you can compare the effects of market volatilities on Tat Techno and Redwire 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 Tat Techno with a short position of Redwire Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tat Techno and Redwire Corp.
Diversification Opportunities for Tat Techno and Redwire Corp
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tat and Redwire is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Tat Techno and Redwire Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redwire Corp and Tat Techno 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 Tat Techno are associated (or correlated) with Redwire Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redwire Corp has no effect on the direction of Tat Techno i.e., Tat Techno and Redwire Corp go up and down completely randomly.
Pair Corralation between Tat Techno and Redwire Corp
Given the investment horizon of 90 days Tat Techno is expected to generate 1.55 times less return on investment than Redwire Corp. But when comparing it to its historical volatility, Tat Techno is 1.75 times less risky than Redwire Corp. It trades about 0.12 of its potential returns per unit of risk. Redwire Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 210.00 in Redwire Corp on August 31, 2024 and sell it today you would earn a total of 1,186 from holding Redwire Corp or generate 564.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Tat Techno vs. Redwire Corp
Performance |
| Timeline |
| Tat Techno |
| Redwire Corp |
Tat Techno and Redwire Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tat Techno and Redwire Corp
The main advantage of trading using opposite Tat Techno and Redwire Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tat Techno position performs unexpectedly, Redwire 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 Redwire Corp will offset losses from the drop in Redwire Corp's long position.| Tat Techno vs. Lilium NV | Tat Techno vs. Archer Aviation | Tat Techno vs. Ehang Holdings | Tat Techno vs. Vertical Aerospace |
| Redwire Corp vs. Sidus Space | Redwire Corp vs. Planet Labs PBC | Redwire Corp vs. Intuitive Machines | Redwire Corp vs. Rocket Lab USA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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