Correlation Between IEI Integration and National Aerospace
Can any of the company-specific risk be diversified away by investing in both IEI Integration and National Aerospace 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 IEI Integration and National Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IEI Integration Corp and National Aerospace Fasteners, you can compare the effects of market volatilities on IEI Integration and National Aerospace 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 IEI Integration with a short position of National Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of IEI Integration and National Aerospace.
Diversification Opportunities for IEI Integration and National Aerospace
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IEI and National is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding IEI Integration Corp and National Aerospace Fasteners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Aerospace and IEI Integration 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 IEI Integration Corp are associated (or correlated) with National Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Aerospace has no effect on the direction of IEI Integration i.e., IEI Integration and National Aerospace go up and down completely randomly.
Pair Corralation between IEI Integration and National Aerospace
Assuming the 90 days trading horizon IEI Integration Corp is expected to generate 1.4 times more return on investment than National Aerospace. However, IEI Integration is 1.4 times more volatile than National Aerospace Fasteners. It trades about 0.03 of its potential returns per unit of risk. National Aerospace Fasteners is currently generating about -0.01 per unit of risk. If you would invest 7,700 in IEI Integration Corp on September 24, 2024 and sell it today you would earn a total of 180.00 from holding IEI Integration Corp or generate 2.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
IEI Integration Corp vs. National Aerospace Fasteners
Performance |
Timeline |
IEI Integration Corp |
National Aerospace |
IEI Integration and National Aerospace Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IEI Integration and National Aerospace
The main advantage of trading using opposite IEI Integration and National Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IEI Integration position performs unexpectedly, National Aerospace 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 National Aerospace will offset losses from the drop in National Aerospace's long position.IEI Integration vs. Century Wind Power | IEI Integration vs. Green World Fintech | IEI Integration vs. Ingentec | IEI Integration vs. Chaheng Precision Co |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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