Correlation Between CPI Aerostructures and SIFCO Industries
Can any of the company-specific risk be diversified away by investing in both CPI Aerostructures and SIFCO Industries 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 SIFCO Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPI Aerostructures and SIFCO Industries, you can compare the effects of market volatilities on CPI Aerostructures and SIFCO Industries 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 SIFCO Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Aerostructures and SIFCO Industries.
Diversification Opportunities for CPI Aerostructures and SIFCO Industries
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CPI and SIFCO is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CPI Aerostructures and SIFCO Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIFCO Industries 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 SIFCO Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIFCO Industries has no effect on the direction of CPI Aerostructures i.e., CPI Aerostructures and SIFCO Industries go up and down completely randomly.
Pair Corralation between CPI Aerostructures and SIFCO Industries
Considering the 90-day investment horizon CPI Aerostructures is expected to under-perform the SIFCO Industries. But the stock apears to be less risky and, when comparing its historical volatility, CPI Aerostructures is 1.4 times less risky than SIFCO Industries. The stock trades about -0.04 of its potential returns per unit of risk. The SIFCO Industries is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 280.00 in SIFCO Industries on March 26, 2025 and sell it today you would earn a total of 82.00 from holding SIFCO Industries or generate 29.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPI Aerostructures vs. SIFCO Industries
Performance |
| Timeline |
| CPI Aerostructures |
| SIFCO Industries |
CPI Aerostructures and SIFCO Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPI Aerostructures and SIFCO Industries
The main advantage of trading using opposite CPI Aerostructures and SIFCO Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPI Aerostructures position performs unexpectedly, SIFCO Industries 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 SIFCO Industries will offset losses from the drop in SIFCO Industries' long position.| CPI Aerostructures vs. Ducommun Incorporated | CPI Aerostructures vs. SIFCO Industries | CPI Aerostructures vs. Innovative Solutions and | CPI Aerostructures vs. Air Industries Group |
| SIFCO Industries vs. Ducommun Incorporated | SIFCO Industries vs. Park Electrochemical | SIFCO Industries vs. National Presto Industries | SIFCO Industries vs. Astronics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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