Correlation Between Conrad Industries and L3Harris Technologies

Can any of the company-specific risk be diversified away by investing in both Conrad Industries and L3Harris Technologies 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 Conrad Industries and L3Harris Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Conrad Industries and L3Harris Technologies, you can compare the effects of market volatilities on Conrad Industries and L3Harris Technologies 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 Conrad Industries with a short position of L3Harris Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conrad Industries and L3Harris Technologies.

Diversification Opportunities for Conrad Industries and L3Harris Technologies

0.56

Correlation Coefficient

Conrad Industries  L3Harris Technologies

Very weak diversification

The 3 months correlation between Conrad and L3Harris is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Conrad Industries and L3Harris Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3Harris Technologies and Conrad Industries 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 Conrad Industries are associated (or correlated) with L3Harris Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3Harris Technologies has no effect on the direction of Conrad Industries i.e., Conrad Industries and L3Harris Technologies go up and down completely randomly.

Pair Corralation between Conrad Industries and L3Harris Technologies

If you would invest  1,030  in Conrad Industries on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Conrad Industries or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.26%
Values	Daily Returns

Conrad Industries  vs.  L3Harris Technologies

Conrad Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conrad Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Conrad Industries is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

L3Harris Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days L3Harris Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Conrad Industries and L3Harris Technologies

The main advantage of trading using opposite Conrad Industries and L3Harris Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conrad Industries position performs unexpectedly, L3Harris Technologies 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 L3Harris Technologies will offset losses from the drop in L3Harris Technologies' long position.

The idea behind Conrad Industries and L3Harris Technologies 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.