Correlation Between Spirit Aerosystems and Hexcel
Can any of the company-specific risk be diversified away by investing in both Spirit Aerosystems 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 Spirit Aerosystems and Hexcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirit Aerosystems Holdings and Hexcel, you can compare the effects of market volatilities on Spirit Aerosystems 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 Spirit Aerosystems with a short position of Hexcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirit Aerosystems and Hexcel.
Diversification Opportunities for Spirit Aerosystems and Hexcel
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Spirit and Hexcel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Aerosystems Holdings and Hexcel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexcel and Spirit Aerosystems 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 Spirit Aerosystems Holdings 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 Spirit Aerosystems i.e., Spirit Aerosystems and Hexcel go up and down completely randomly.
Pair Corralation between Spirit Aerosystems and Hexcel
Considering the 90-day investment horizon Spirit Aerosystems Holdings is expected to generate 0.87 times more return on investment than Hexcel. However, Spirit Aerosystems Holdings is 1.14 times less risky than Hexcel. It trades about 0.06 of its potential returns per unit of risk. Hexcel is currently generating about -0.01 per unit of risk. If you would invest 3,123 in Spirit Aerosystems Holdings on May 1, 2025 and sell it today you would earn a total of 913.00 from holding Spirit Aerosystems Holdings or generate 29.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.65% |
| Values | Daily Returns |
Spirit Aerosystems Holdings vs. Hexcel
Performance |
| Timeline |
| Spirit Aerosystems |
| Hexcel |
Spirit Aerosystems and Hexcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirit Aerosystems and Hexcel
The main advantage of trading using opposite Spirit Aerosystems and Hexcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Aerosystems 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.| Spirit Aerosystems vs. Textron | Spirit Aerosystems vs. Triumph Group | Spirit Aerosystems vs. Embraer SA ADR | Spirit Aerosystems vs. The Boeing |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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