Correlation Between Huntington Ingalls and Sturm Ruger

Can any of the company-specific risk be diversified away by investing in both Huntington Ingalls and Sturm Ruger 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 Sturm Ruger 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 Sturm Ruger, you can compare the effects of market volatilities on Huntington Ingalls and Sturm Ruger 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 Sturm Ruger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntington Ingalls and Sturm Ruger.

Diversification Opportunities for Huntington Ingalls and Sturm Ruger

-0.71

Correlation Coefficient

Huntington Ingalls  Sturm Ruger

Pay attention - limited upside

The 3 months correlation between Huntington and Sturm is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Ingalls Industries and Sturm Ruger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sturm Ruger 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 Sturm Ruger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sturm Ruger has no effect on the direction of Huntington Ingalls i.e., Huntington Ingalls and Sturm Ruger go up and down completely randomly.

Pair Corralation between Huntington Ingalls and Sturm Ruger

Considering the 90-day investment horizon Huntington Ingalls Industries is expected to generate 1.04 times more return on investment than Sturm Ruger. However, Huntington Ingalls is 1.04 times more volatile than Sturm Ruger. It trades about 0.16 of its potential returns per unit of risk. Sturm Ruger is currently generating about -0.05 per unit of risk. If you would invest  22,866  in Huntington Ingalls Industries on May 16, 2025 and sell it today you would earn a total of  4,077  from holding Huntington Ingalls Industries or generate 17.83% return on investment over 90 days.

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

Huntington Ingalls Industries  vs.  Sturm Ruger

Huntington Ingalls

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Ingalls Industries are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Huntington Ingalls demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Sturm Ruger

Risk-Adjusted Performance

Weakest

Over the last 90 days Sturm Ruger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Sturm Ruger is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Huntington Ingalls and Sturm Ruger

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

The idea behind Huntington Ingalls Industries and Sturm Ruger 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.