Correlation Between Astronics and Sky Harbour

Can any of the company-specific risk be diversified away by investing in both Astronics and Sky Harbour 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 Astronics and Sky Harbour into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astronics and Sky Harbour Group, you can compare the effects of market volatilities on Astronics and Sky Harbour 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 Astronics with a short position of Sky Harbour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astronics and Sky Harbour.

Diversification Opportunities for Astronics and Sky Harbour

-0.17

Correlation Coefficient

Astronics  Sky Harbour

Good diversification

The 3 months correlation between Astronics and Sky is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Astronics and Sky Harbour Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky Harbour Group and Astronics 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 Astronics are associated (or correlated) with Sky Harbour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky Harbour Group has no effect on the direction of Astronics i.e., Astronics and Sky Harbour go up and down completely randomly.

Pair Corralation between Astronics and Sky Harbour

Given the investment horizon of 90 days Astronics is expected to generate 1.47 times more return on investment than Sky Harbour. However, Astronics is 1.47 times more volatile than Sky Harbour Group. It trades about 0.22 of its potential returns per unit of risk. Sky Harbour Group is currently generating about 0.1 per unit of risk. If you would invest  1,580  in Astronics on December 28, 2024 and sell it today you would earn a total of  887.00  from holding Astronics or generate 56.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Astronics  vs.  Sky Harbour Group

Astronics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Astronics are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Astronics displayed solid returns over the last few months and may actually be approaching a breakup point.

Sky Harbour Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sky Harbour Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Sky Harbour demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astronics and Sky Harbour

The main advantage of trading using opposite Astronics and Sky Harbour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astronics position performs unexpectedly, Sky Harbour 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 Sky Harbour will offset losses from the drop in Sky Harbour's long position.

The idea behind Astronics and Sky Harbour Group 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.