Correlation Between AeroVironment and Veralto
Can any of the company-specific risk be diversified away by investing in both AeroVironment and Veralto 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 AeroVironment and Veralto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AeroVironment and Veralto, you can compare the effects of market volatilities on AeroVironment and Veralto 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 AeroVironment with a short position of Veralto. Check out your portfolio center. Please also check ongoing floating volatility patterns of AeroVironment and Veralto.
Diversification Opportunities for AeroVironment and Veralto
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AeroVironment and Veralto is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding AeroVironment and Veralto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veralto and AeroVironment 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 AeroVironment are associated (or correlated) with Veralto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veralto has no effect on the direction of AeroVironment i.e., AeroVironment and Veralto go up and down completely randomly.
Pair Corralation between AeroVironment and Veralto
Given the investment horizon of 90 days AeroVironment is expected to generate 3.55 times more return on investment than Veralto. However, AeroVironment is 3.55 times more volatile than Veralto. It trades about 0.09 of its potential returns per unit of risk. Veralto is currently generating about -0.12 per unit of risk. If you would invest 24,713 in AeroVironment on August 16, 2025 and sell it today you would earn a total of 4,408 from holding AeroVironment or generate 17.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AeroVironment vs. Veralto
Performance |
| Timeline |
| AeroVironment |
| Veralto |
AeroVironment and Veralto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AeroVironment and Veralto
The main advantage of trading using opposite AeroVironment and Veralto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroVironment position performs unexpectedly, Veralto 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 Veralto will offset losses from the drop in Veralto's long position.| AeroVironment vs. BWX Technologies | AeroVironment vs. Kratos Defense Security | AeroVironment vs. Woodward | AeroVironment vs. Elbit Systems |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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