Correlation Between L3Harris Technologies and ALABAMA AIRCRAFT

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Can any of the company-specific risk be diversified away by investing in both L3Harris Technologies and ALABAMA AIRCRAFT 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 L3Harris Technologies and ALABAMA AIRCRAFT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L3Harris Technologies and ALABAMA AIRCRAFT INDUSTRIES, you can compare the effects of market volatilities on L3Harris Technologies and ALABAMA AIRCRAFT 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 L3Harris Technologies with a short position of ALABAMA AIRCRAFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of L3Harris Technologies and ALABAMA AIRCRAFT.

Diversification Opportunities for L3Harris Technologies and ALABAMA AIRCRAFT

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between L3Harris and ALABAMA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding L3Harris Technologies and ALABAMA AIRCRAFT INDUSTRIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALABAMA AIRCRAFT IND and L3Harris Technologies 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 L3Harris Technologies are associated (or correlated) with ALABAMA AIRCRAFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALABAMA AIRCRAFT IND has no effect on the direction of L3Harris Technologies i.e., L3Harris Technologies and ALABAMA AIRCRAFT go up and down completely randomly.

Pair Corralation between L3Harris Technologies and ALABAMA AIRCRAFT

Considering the 90-day investment horizon L3Harris Technologies is expected to generate 18.2 times less return on investment than ALABAMA AIRCRAFT. But when comparing it to its historical volatility, L3Harris Technologies is 15.32 times less risky than ALABAMA AIRCRAFT. It trades about 0.04 of its potential returns per unit of risk. ALABAMA AIRCRAFT INDUSTRIES is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4.00  in ALABAMA AIRCRAFT INDUSTRIES on April 2, 2022 and sell it today you would lose (2.00)  from holding ALABAMA AIRCRAFT INDUSTRIES or give up 50.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

L3Harris Technologies  vs.  ALABAMA AIRCRAFT INDUSTRIES

 Performance (%) 
      Timeline 
L3Harris Technologies 
L3Harris Performance
0 of 100
Over the last 90 days L3Harris Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, L3Harris Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.019
Payout Ratio
0.33
Last Split Factor
10000:9448
Forward Annual Dividend Rate
4.48
Dividend Date
2022-06-17
Ex Dividend Date
2022-06-02
Last Split Date
2009-05-11

L3Harris Price Channel

ALABAMA AIRCRAFT IND 
ALABAMA Performance
0 of 100
Over the last 90 days ALABAMA AIRCRAFT INDUSTRIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, ALABAMA AIRCRAFT is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the insiders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0679
Last Split Factor
1:4
Last Split Date
1998-04-15

ALABAMA Price Channel

L3Harris Technologies and ALABAMA AIRCRAFT Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with L3Harris Technologies and ALABAMA AIRCRAFT

The main advantage of trading using opposite L3Harris Technologies and ALABAMA AIRCRAFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L3Harris Technologies position performs unexpectedly, ALABAMA AIRCRAFT 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 ALABAMA AIRCRAFT will offset losses from the drop in ALABAMA AIRCRAFT's long position.
The idea behind L3Harris Technologies and ALABAMA AIRCRAFT INDUSTRIES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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