Correlation Between General Dynamics and Spirit Aerosystems
Can any of the company-specific risk be diversified away by investing in both General Dynamics 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 General Dynamics and Spirit Aerosystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Dynamics and Spirit Aerosystems Holdings, you can compare the effects of market volatilities on General Dynamics 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 General Dynamics with a short position of Spirit Aerosystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Dynamics and Spirit Aerosystems.
Diversification Opportunities for General Dynamics and Spirit Aerosystems
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between General and Spirit is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and Spirit Aerosystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Aerosystems and General Dynamics 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 General Dynamics 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 General Dynamics i.e., General Dynamics and Spirit Aerosystems go up and down completely randomly.
Pair Corralation between General Dynamics and Spirit Aerosystems
Allowing for the 90-day total investment horizon General Dynamics is expected to generate 0.63 times more return on investment than Spirit Aerosystems. However, General Dynamics is 1.6 times less risky than Spirit Aerosystems. It trades about 0.16 of its potential returns per unit of risk. Spirit Aerosystems Holdings is currently generating about -0.1 per unit of risk. If you would invest 31,221 in General Dynamics on August 16, 2025 and sell it today you would earn a total of 3,185 from holding General Dynamics or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Dynamics vs. Spirit Aerosystems Holdings
Performance |
| Timeline |
| General Dynamics |
| Spirit Aerosystems |
General Dynamics and Spirit Aerosystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Dynamics and Spirit Aerosystems
The main advantage of trading using opposite General Dynamics and Spirit Aerosystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Dynamics 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.| General Dynamics vs. Northrop Grumman | General Dynamics vs. Lockheed Martin | General Dynamics vs. 3M Company | General Dynamics vs. Transdigm Group Incorporated |
| Spirit Aerosystems vs. Firefly Aerospace Common | Spirit Aerosystems vs. Plug Power | Spirit Aerosystems vs. Mercury Systems | Spirit Aerosystems vs. Hexcel |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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