Correlation Between SIFCO Industries and Hexcel
Can any of the company-specific risk be diversified away by investing in both SIFCO Industries and Hexcel 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 SIFCO Industries and Hexcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIFCO Industries and Hexcel, you can compare the effects of market volatilities on SIFCO Industries and Hexcel 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 SIFCO Industries with a short position of Hexcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIFCO Industries and Hexcel.
Diversification Opportunities for SIFCO Industries and Hexcel
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SIFCO and Hexcel is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SIFCO Industries and Hexcel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexcel and SIFCO Industries 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 SIFCO Industries are associated (or correlated) with Hexcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexcel has no effect on the direction of SIFCO Industries i.e., SIFCO Industries and Hexcel go up and down completely randomly.
Pair Corralation between SIFCO Industries and Hexcel
Considering the 90-day investment horizon SIFCO Industries is expected to generate 3.39 times more return on investment than Hexcel. However, SIFCO Industries is 3.39 times more volatile than Hexcel. It trades about 0.24 of its potential returns per unit of risk. Hexcel is currently generating about 0.16 per unit of risk. If you would invest 361.00 in SIFCO Industries on June 5, 2025 and sell it today you would earn a total of 324.00 from holding SIFCO Industries or generate 89.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIFCO Industries vs. Hexcel
Performance |
| Timeline |
| SIFCO Industries |
| Hexcel |
SIFCO Industries and Hexcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIFCO Industries and Hexcel
The main advantage of trading using opposite SIFCO Industries and Hexcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIFCO Industries position performs unexpectedly, Hexcel 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 Hexcel will offset losses from the drop in Hexcel's long position.| SIFCO Industries vs. Air Industries Group | SIFCO Industries vs. Ballistic Recovery Systems | SIFCO Industries vs. CPI Aerostructures | SIFCO Industries vs. Ducommun Incorporated |
| Hexcel vs. Curtiss Wright | Hexcel vs. Mercury Systems | Hexcel vs. AAR Corp | Hexcel 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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