Correlation Between Embraer SA and Huntington Ingalls
Can any of the company-specific risk be diversified away by investing in both Embraer SA and Huntington Ingalls 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 Embraer SA and Huntington Ingalls into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embraer SA ADR and Huntington Ingalls Industries, you can compare the effects of market volatilities on Embraer SA and Huntington Ingalls 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 Embraer SA with a short position of Huntington Ingalls. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embraer SA and Huntington Ingalls.
Diversification Opportunities for Embraer SA and Huntington Ingalls
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Embraer and Huntington is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Embraer SA ADR and Huntington Ingalls Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Ingalls and Embraer SA 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 Embraer SA ADR are associated (or correlated) with Huntington Ingalls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntington Ingalls has no effect on the direction of Embraer SA i.e., Embraer SA and Huntington Ingalls go up and down completely randomly.
Pair Corralation between Embraer SA and Huntington Ingalls
Considering the 90-day investment horizon Embraer SA is expected to generate 1.24 times less return on investment than Huntington Ingalls. In addition to that, Embraer SA is 1.29 times more volatile than Huntington Ingalls Industries. It trades about 0.11 of its total potential returns per unit of risk. Huntington Ingalls Industries is currently generating about 0.17 per unit of volatility. If you would invest 26,629 in Huntington Ingalls Industries on August 17, 2025 and sell it today you would earn a total of 4,768 from holding Huntington Ingalls Industries or generate 17.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.94% |
| Values | Daily Returns |
Embraer SA ADR vs. Huntington Ingalls Industries
Performance |
| Timeline |
| Embraer SA ADR |
Risk-Adjusted Performance
Fair
Weak | Strong |
| Huntington Ingalls |
Embraer SA and Huntington Ingalls Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embraer SA and Huntington Ingalls
The main advantage of trading using opposite Embraer SA and Huntington Ingalls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embraer SA position performs unexpectedly, Huntington Ingalls 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 Huntington Ingalls will offset losses from the drop in Huntington Ingalls' long position.| Embraer SA vs. Huntington Ingalls Industries | Embraer SA vs. Leonardo DRS, Common | Embraer SA vs. Textron | Embraer SA vs. Topbuild Corp |
| Huntington Ingalls vs. Textron | Huntington Ingalls vs. Builders FirstSource | Huntington Ingalls vs. Topbuild Corp | Huntington Ingalls vs. Lincoln Electric Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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