Correlation Between V2X and Astronics Corp
Can any of the company-specific risk be diversified away by investing in both V2X and Astronics 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 V2X and Astronics Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between V2X Inc and Astronics Corp Cl, you can compare the effects of market volatilities on V2X and Astronics 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 V2X with a short position of Astronics Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of V2X and Astronics Corp.
Diversification Opportunities for V2X and Astronics Corp
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between V2X and Astronics is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding V2X Inc and Astronics Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics Corp Cl and V2X 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 V2X Inc are associated (or correlated) with Astronics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics Corp Cl has no effect on the direction of V2X i.e., V2X and Astronics Corp go up and down completely randomly.
Pair Corralation between V2X and Astronics Corp
Considering the 90-day investment horizon V2X is expected to generate 1.88 times less return on investment than Astronics Corp. But when comparing it to its historical volatility, V2X Inc is 1.91 times less risky than Astronics Corp. It trades about 0.05 of its potential returns per unit of risk. Astronics Corp Cl is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 975.00 in Astronics Corp Cl on September 2, 2024 and sell it today you would earn a total of 609.00 from holding Astronics Corp Cl or generate 62.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.66% |
| Values | Daily Returns |
V2X Inc vs. Astronics Corp Cl
Performance |
| Timeline |
| V2X Inc |
| Astronics Corp Cl |
V2X and Astronics Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with V2X and Astronics Corp
The main advantage of trading using opposite V2X and Astronics Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V2X position performs unexpectedly, Astronics 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 Astronics Corp will offset losses from the drop in Astronics Corp's long position.The idea behind V2X Inc and Astronics Corp Cl 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.| Astronics Corp vs. Firan Technology Group | Astronics Corp vs. 808 Renewable Energy | Astronics Corp vs. Park Electrochemical | Astronics Corp vs. Innovative Solutions and |
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 Stocks Directory module to find actively traded stocks across global markets.
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