Correlation Between ERHC Energy and Spirit Aerosystems
Can any of the company-specific risk be diversified away by investing in both ERHC Energy and Spirit Aerosystems 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 ERHC Energy and Spirit Aerosystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ERHC Energy and Spirit Aerosystems Holdings, you can compare the effects of market volatilities on ERHC Energy and Spirit Aerosystems 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 ERHC Energy with a short position of Spirit Aerosystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of ERHC Energy and Spirit Aerosystems.
Diversification Opportunities for ERHC Energy and Spirit Aerosystems
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ERHC and Spirit is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ERHC Energy and Spirit Aerosystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Aerosystems and ERHC Energy 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 ERHC Energy are associated (or correlated) with Spirit Aerosystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Aerosystems has no effect on the direction of ERHC Energy i.e., ERHC Energy and Spirit Aerosystems go up and down completely randomly.
Pair Corralation between ERHC Energy and Spirit Aerosystems
Given the investment horizon of 90 days ERHC Energy is expected to generate 142.18 times more return on investment than Spirit Aerosystems. However, ERHC Energy is 142.18 times more volatile than Spirit Aerosystems Holdings. It trades about 0.23 of its potential returns per unit of risk. Spirit Aerosystems Holdings is currently generating about -0.14 per unit of risk. If you would invest 0.01 in ERHC Energy on August 29, 2025 and sell it today you would earn a total of 0.51 from holding ERHC Energy or generate 5100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
ERHC Energy vs. Spirit Aerosystems Holdings
Performance |
| Timeline |
| ERHC Energy |
| Spirit Aerosystems |
ERHC Energy and Spirit Aerosystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ERHC Energy and Spirit Aerosystems
The main advantage of trading using opposite ERHC Energy and Spirit Aerosystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ERHC Energy position performs unexpectedly, Spirit Aerosystems 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 Spirit Aerosystems will offset losses from the drop in Spirit Aerosystems' long position.| ERHC Energy vs. Alaska Air Group | ERHC Energy vs. Ryanair Holdings PLC | ERHC Energy vs. Sinclair Broadcast Group | ERHC Energy vs. DATA Communications Management |
| Spirit Aerosystems vs. Methode Electronics | Spirit Aerosystems vs. Arrow Electronics | Spirit Aerosystems vs. Juma Technology Corp | Spirit Aerosystems vs. LPKF Laser Electronics |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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