Correlation Between HEICO and Sidus Space

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

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

Diversification Opportunities for HEICO and Sidus Space

-0.71

Correlation Coefficient

HEICO  Sidus Space

Pay attention - limited upside

The 3 months correlation between HEICO and Sidus is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding HEICO and Sidus Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidus Space and HEICO 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 HEICO are associated (or correlated) with Sidus Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidus Space has no effect on the direction of HEICO i.e., HEICO and Sidus Space go up and down completely randomly.

Pair Corralation between HEICO and Sidus Space

Assuming the 90 days horizon HEICO is expected to generate 1.73 times less return on investment than Sidus Space. But when comparing it to its historical volatility, HEICO is 11.28 times less risky than Sidus Space. It trades about 0.13 of its potential returns per unit of risk. Sidus Space is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  540.00  in Sidus Space on September 2, 2024 and sell it today you would lose (390.00) from holding Sidus Space or give up 72.22% of portfolio value over 90 days.

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

HEICO  vs.  Sidus Space

HEICO

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HEICO are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, HEICO may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sidus Space

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sidus Space has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with HEICO and Sidus Space

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

The idea behind HEICO and Sidus Space 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.