Correlation Between FLYHT Aerospace and Current Water

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

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

Diversification Opportunities for FLYHT Aerospace and Current Water

-0.38

Correlation Coefficient

FLYHT Aerospace  Current Water

Very good diversification

The 3 months correlation between FLYHT and Current is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FLYHT Aerospace Solutions and Current Water Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Current Water Techno and FLYHT Aerospace 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 FLYHT Aerospace Solutions are associated (or correlated) with Current Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Current Water Techno has no effect on the direction of FLYHT Aerospace i.e., FLYHT Aerospace and Current Water go up and down completely randomly.

Pair Corralation between FLYHT Aerospace and Current Water

Assuming the 90 days horizon FLYHT Aerospace is expected to generate 1.09 times less return on investment than Current Water. But when comparing it to its historical volatility, FLYHT Aerospace Solutions is 2.35 times less risky than Current Water. It trades about 0.19 of its potential returns per unit of risk. Current Water Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Current Water Technologies on September 12, 2024 and sell it today you would earn a total of  0.50  from holding Current Water Technologies or generate 16.67% return on investment over 90 days.

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

FLYHT Aerospace Solutions  vs.  Current Water Technologies

FLYHT Aerospace Solutions

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FLYHT Aerospace Solutions are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, FLYHT Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

Current Water Techno

Risk-Adjusted Performance

6 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Current Water Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Current Water showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FLYHT Aerospace and Current Water

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

The idea behind FLYHT Aerospace Solutions and Current Water 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.