Correlation Between Draganfly and Huntington Ingalls

Can any of the company-specific risk be diversified away by investing in both Draganfly and Huntington Ingalls 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 Draganfly and Huntington Ingalls into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Draganfly and Huntington Ingalls Industries, you can compare the effects of market volatilities on Draganfly and Huntington Ingalls 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 Draganfly with a short position of Huntington Ingalls. Check out your portfolio center. Please also check ongoing floating volatility patterns of Draganfly and Huntington Ingalls.

Diversification Opportunities for Draganfly and Huntington Ingalls

-0.72

Correlation Coefficient

Draganfly  Huntington Ingalls

Pay attention - limited upside

The 3 months correlation between Draganfly and Huntington is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Draganfly and Huntington Ingalls Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Ingalls and Draganfly 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 Draganfly are associated (or correlated) with Huntington Ingalls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntington Ingalls has no effect on the direction of Draganfly i.e., Draganfly and Huntington Ingalls go up and down completely randomly.

Pair Corralation between Draganfly and Huntington Ingalls

Given the investment horizon of 90 days Draganfly is expected to generate 8.93 times more return on investment than Huntington Ingalls. However, Draganfly is 8.93 times more volatile than Huntington Ingalls Industries. It trades about 0.31 of its potential returns per unit of risk. Huntington Ingalls Industries is currently generating about -0.25 per unit of risk. If you would invest  17.00  in Draganfly on January 25, 2024 and sell it today you would earn a total of  10.95  from holding Draganfly or generate 64.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Draganfly  vs.  Huntington Ingalls Industries

Draganfly

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Draganfly are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Draganfly may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Huntington Ingalls

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Ingalls Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Huntington Ingalls may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Draganfly and Huntington Ingalls

The main advantage of trading using opposite Draganfly and Huntington Ingalls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Draganfly position performs unexpectedly, Huntington Ingalls 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 Huntington Ingalls will offset losses from the drop in Huntington Ingalls' long position.

The idea behind Draganfly and Huntington Ingalls 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 the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.