Correlation Between Huntington Ingalls and Ammo Preferred
Can any of the company-specific risk be diversified away by investing in both Huntington Ingalls and Ammo Preferred 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 Huntington Ingalls and Ammo Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntington Ingalls Industries and Ammo Preferred, you can compare the effects of market volatilities on Huntington Ingalls and Ammo Preferred 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 Huntington Ingalls with a short position of Ammo Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Ingalls and Ammo Preferred.
Diversification Opportunities for Huntington Ingalls and Ammo Preferred
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Huntington and Ammo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Ingalls Industries and Ammo Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ammo Preferred and Huntington Ingalls 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 Huntington Ingalls Industries are associated (or correlated) with Ammo Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ammo Preferred has no effect on the direction of Huntington Ingalls i.e., Huntington Ingalls and Ammo Preferred go up and down completely randomly.
Pair Corralation between Huntington Ingalls and Ammo Preferred
Considering the 90-day investment horizon Huntington Ingalls is expected to generate 1.2 times less return on investment than Ammo Preferred. In addition to that, Huntington Ingalls is 1.46 times more volatile than Ammo Preferred. It trades about 0.05 of its total potential returns per unit of risk. Ammo Preferred is currently generating about 0.08 per unit of volatility. If you would invest 2,115 in Ammo Preferred on June 9, 2024 and sell it today you would earn a total of 536.00 from holding Ammo Preferred or generate 25.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.66% |
Values | Daily Returns |
Huntington Ingalls Industries vs. Ammo Preferred
Performance |
Timeline |
Huntington Ingalls |
Ammo Preferred |
Huntington Ingalls and Ammo Preferred Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Huntington Ingalls and Ammo Preferred
The main advantage of trading using opposite Huntington Ingalls and Ammo Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Ingalls position performs unexpectedly, Ammo Preferred 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 Ammo Preferred will offset losses from the drop in Ammo Preferred's long position.Huntington Ingalls vs. Lockheed Martin | Huntington Ingalls vs. General Dynamics | Huntington Ingalls vs. Raytheon Technologies Corp | Huntington Ingalls vs. L3Harris Technologies |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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