Correlation Between Saker Aviation and V2X

Can any of the company-specific risk be diversified away by investing in both Saker Aviation and V2X 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 Saker Aviation and V2X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Saker Aviation Services and V2X Inc, you can compare the effects of market volatilities on Saker Aviation and V2X 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 Saker Aviation with a short position of V2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saker Aviation and V2X.

Diversification Opportunities for Saker Aviation and V2X

0.15

Correlation Coefficient

Saker Aviation  V2X

Average diversification

The 3 months correlation between Saker and V2X is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Saker Aviation Services and V2X Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V2X Inc and Saker Aviation 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 Saker Aviation Services are associated (or correlated) with V2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V2X Inc has no effect on the direction of Saker Aviation i.e., Saker Aviation and V2X go up and down completely randomly.

Pair Corralation between Saker Aviation and V2X

Given the investment horizon of 90 days Saker Aviation Services is expected to under-perform the V2X. In addition to that, Saker Aviation is 1.1 times more volatile than V2X Inc. It trades about -0.11 of its total potential returns per unit of risk. V2X Inc is currently generating about 0.18 per unit of volatility. If you would invest  4,598  in V2X Inc on February 1, 2024 and sell it today you would earn a total of  260.00  from holding V2X Inc or generate 5.65% return on investment over 90 days.

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

Saker Aviation Services  vs.  V2X Inc

Saker Aviation Services

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Saker Aviation Services are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Saker Aviation is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

V2X Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in V2X Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, V2X showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saker Aviation and V2X

The main advantage of trading using opposite Saker Aviation and V2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saker Aviation position performs unexpectedly, V2X 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 V2X will offset losses from the drop in V2X's long position.

The idea behind Saker Aviation Services and V2X Inc 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.