Correlation Between Sturm Ruger and Howmet Aerospace
Can any of the company-specific risk be diversified away by investing in both Sturm Ruger and Howmet Aerospace 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 Sturm Ruger and Howmet Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sturm Ruger and Howmet Aerospace, you can compare the effects of market volatilities on Sturm Ruger and Howmet Aerospace 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 Sturm Ruger with a short position of Howmet Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sturm Ruger and Howmet Aerospace.
Diversification Opportunities for Sturm Ruger and Howmet Aerospace
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sturm and Howmet is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sturm Ruger and Howmet Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Howmet Aerospace and Sturm Ruger 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 Sturm Ruger are associated (or correlated) with Howmet Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Howmet Aerospace has no effect on the direction of Sturm Ruger i.e., Sturm Ruger and Howmet Aerospace go up and down completely randomly.
Pair Corralation between Sturm Ruger and Howmet Aerospace
Considering the 90-day investment horizon Sturm Ruger is expected to generate 3.24 times less return on investment than Howmet Aerospace. In addition to that, Sturm Ruger is 1.24 times more volatile than Howmet Aerospace. It trades about 0.11 of its total potential returns per unit of risk. Howmet Aerospace is currently generating about 0.45 per unit of volatility. If you would invest 15,696 in Howmet Aerospace on March 11, 2025 and sell it today you would earn a total of 1,591 from holding Howmet Aerospace or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sturm Ruger vs. Howmet Aerospace
Performance |
| Timeline |
| Sturm Ruger |
| Howmet Aerospace |
Sturm Ruger and Howmet Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sturm Ruger and Howmet Aerospace
The main advantage of trading using opposite Sturm Ruger and Howmet Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sturm Ruger position performs unexpectedly, Howmet Aerospace 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 Howmet Aerospace will offset losses from the drop in Howmet Aerospace's long position.| Sturm Ruger vs. Ammo Inc | Sturm Ruger vs. Kratos Defense Security | Sturm Ruger vs. VSE Corporation | Sturm Ruger vs. Ammo Preferred |
| Howmet Aerospace vs. Curtiss Wright | Howmet Aerospace vs. Mercury Systems | Howmet Aerospace vs. AAR Corp | Howmet Aerospace vs. Ducommun Incorporated |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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