Correlation Between Iron Mountain and Huntington Ingalls

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

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

Diversification Opportunities for Iron Mountain and Huntington Ingalls

0.22

Correlation Coefficient

Iron Mountain  Huntington Ingalls

Modest diversification

The 3 months correlation between Iron and Huntington is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Huntington Ingalls Industries, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Ingalls and Iron Mountain 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 Iron Mountain Incorporated are associated (or correlated) with Huntington Ingalls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntington Ingalls has no effect on the direction of Iron Mountain i.e., Iron Mountain and Huntington Ingalls go up and down completely randomly.

Pair Corralation between Iron Mountain and Huntington Ingalls

Assuming the 90 days trading horizon Iron Mountain Incorporated is expected to under-perform the Huntington Ingalls. In addition to that, Iron Mountain is 1.35 times more volatile than Huntington Ingalls Industries,. It trades about -0.26 of its total potential returns per unit of risk. Huntington Ingalls Industries, is currently generating about -0.04 per unit of volatility. If you would invest  1,550  in Huntington Ingalls Industries, on October 23, 2024 and sell it today you would lose (10.00) from holding Huntington Ingalls Industries, or give up 0.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

Iron Mountain Incorporated  vs.  Huntington Ingalls Industries,

Iron Mountain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iron Mountain Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat 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.

Huntington Ingalls

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Huntington Ingalls Industries, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat 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 Iron Mountain and Huntington Ingalls

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

The idea behind Iron Mountain Incorporated and Huntington Ingalls Industries, 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.