Correlation Between Tel Instrument and CPI Aerostructures
Can any of the company-specific risk be diversified away by investing in both Tel Instrument 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 Tel Instrument and CPI Aerostructures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tel Instrument Electronics Corp and CPI Aerostructures, you can compare the effects of market volatilities on Tel Instrument 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 Tel Instrument with a short position of CPI Aerostructures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Instrument and CPI Aerostructures.
Diversification Opportunities for Tel Instrument and CPI Aerostructures
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tel and CPI is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tel Instrument Electronics Cor and CPI Aerostructures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPI Aerostructures and Tel Instrument 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 Tel Instrument Electronics Corp 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 Tel Instrument i.e., Tel Instrument and CPI Aerostructures go up and down completely randomly.
Pair Corralation between Tel Instrument and CPI Aerostructures
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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 2.22% |
| Values | Daily Returns |
Tel Instrument Electronics Cor vs. CPI Aerostructures
Performance |
| Timeline |
| Tel Instrument Elect |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CPI Aerostructures |
Tel Instrument and CPI Aerostructures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tel Instrument and CPI Aerostructures
The main advantage of trading using opposite Tel Instrument and CPI Aerostructures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Instrument 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.| Tel Instrument vs. 808 Renewable Energy | Tel Instrument vs. Austal Limited | Tel Instrument vs. Sky Harbour Group | Tel Instrument vs. VirTra Inc |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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