Correlation Between Sturm Ruger and Spirit Aerosystems
Can any of the company-specific risk be diversified away by investing in both Sturm Ruger 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 Sturm Ruger and Spirit Aerosystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sturm Ruger and Spirit Aerosystems Holdings, you can compare the effects of market volatilities on Sturm Ruger 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 Sturm Ruger with a short position of Spirit Aerosystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sturm Ruger and Spirit Aerosystems.
Diversification Opportunities for Sturm Ruger and Spirit Aerosystems
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sturm and Spirit is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sturm Ruger and Spirit Aerosystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Aerosystems 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 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 Sturm Ruger i.e., Sturm Ruger and Spirit Aerosystems go up and down completely randomly.
Pair Corralation between Sturm Ruger and Spirit Aerosystems
Considering the 90-day investment horizon Sturm Ruger is expected to under-perform the Spirit Aerosystems. In addition to that, Sturm Ruger is 1.01 times more volatile than Spirit Aerosystems Holdings. It trades about -0.04 of its total potential returns per unit of risk. Spirit Aerosystems Holdings is currently generating about 0.1 per unit of volatility. If you would invest 3,786 in Spirit Aerosystems Holdings on May 1, 2025 and sell it today you would earn a total of 196.00 from holding Spirit Aerosystems Holdings or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sturm Ruger vs. Spirit Aerosystems Holdings
Performance |
| Timeline |
| Sturm Ruger |
| Spirit Aerosystems |
Sturm Ruger and Spirit Aerosystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sturm Ruger and Spirit Aerosystems
The main advantage of trading using opposite Sturm Ruger and Spirit Aerosystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sturm Ruger 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.| Sturm Ruger vs. Smith Wesson Brands | Sturm Ruger vs. Ammo Inc | Sturm Ruger vs. Park Electrochemical | Sturm Ruger vs. Ammo Preferred |
| Spirit Aerosystems vs. Textron | Spirit Aerosystems vs. Triumph Group | Spirit Aerosystems vs. Embraer SA ADR | Spirit Aerosystems vs. The Boeing |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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