Correlation Between CPI Aerostructures and Kaman

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

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

Diversification Opportunities for CPI Aerostructures and Kaman

0.0

Correlation Coefficient

CPI Aerostructures  Kaman

Pay attention - limited upside

The 3 months correlation between CPI and Kaman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CPI Aerostructures and Kaman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaman and CPI Aerostructures 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 CPI Aerostructures are associated (or correlated) with Kaman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaman has no effect on the direction of CPI Aerostructures i.e., CPI Aerostructures and Kaman go up and down completely randomly.

Pair Corralation between CPI Aerostructures and Kaman

If you would invest (100.00) in Kaman on December 23, 2024 and sell it today you would earn a total of  100.00  from holding Kaman or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CPI Aerostructures  vs.  Kaman

CPI Aerostructures

Risk-Adjusted Performance

Very Weak

Over the last 90 days CPI Aerostructures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CPI Aerostructures is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Kaman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kaman has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Kaman is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CPI Aerostructures and Kaman

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

The idea behind CPI Aerostructures and Kaman 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.