Correlation Between Huntington Ingalls and Astra Space

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

Diversification Opportunities for Huntington Ingalls and Astra Space

-0.57
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Huntington and Astra is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Ingalls Industries and Astra Space Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Space and Huntington Ingalls 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 Huntington Ingalls Industries are associated (or correlated) with Astra Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Space has no effect on the direction of Huntington Ingalls i.e., Huntington Ingalls and Astra Space go up and down completely randomly.

Pair Corralation between Huntington Ingalls and Astra Space

Considering the 90-day investment horizon Huntington Ingalls Industries is expected to generate 0.21 times more return on investment than Astra Space. However, Huntington Ingalls Industries is 4.84 times less risky than Astra Space. It trades about -0.1 of its potential returns per unit of risk. Astra Space is currently generating about -0.15 per unit of risk. If you would invest  23,157  in Huntington Ingalls Industries on July 1, 2022 and sell it today you would lose (622.00)  from holding Huntington Ingalls Industries or give up 2.69% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Huntington Ingalls Industries  vs.  Astra Space Inc

 Performance (%) 
       Timeline  
Huntington Ingalls 
Huntington Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Ingalls Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Huntington Ingalls is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Huntington Price Channel

Astra Space 
Astra Performance
0 of 100
Over the last 90 days Astra Space has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in October 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Astra Price Channel

Huntington Ingalls and Astra Space Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Huntington Ingalls and Astra Space

The main advantage of trading using opposite Huntington Ingalls and Astra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Ingalls position performs unexpectedly, Astra Space 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 Astra Space will offset losses from the drop in Astra Space's long position.
Huntington Ingalls vs. Amazon Inc
The idea behind Huntington Ingalls Industries and Astra Space 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.
Astra Space vs. Amazon Inc
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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