Correlation Between Sturm Ruger and Textron

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

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

Diversification Opportunities for Sturm Ruger and Textron

0.05

Correlation Coefficient

Sturm Ruger  Textron

Significant diversification

The 3 months correlation between Sturm and Textron is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sturm Ruger and Textron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Textron and Sturm Ruger 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 Sturm Ruger are associated (or correlated) with Textron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Textron has no effect on the direction of Sturm Ruger i.e., Sturm Ruger and Textron go up and down completely randomly.

Pair Corralation between Sturm Ruger and Textron

Considering the 90-day investment horizon Sturm Ruger is expected to under-perform the Textron. In addition to that, Sturm Ruger is 1.57 times more volatile than Textron. It trades about -0.08 of its total potential returns per unit of risk. Textron is currently generating about 0.12 per unit of volatility. If you would invest  7,035  in Textron on April 30, 2025 and sell it today you would earn a total of  821.00  from holding Textron or generate 11.67% return on investment over 90 days.

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

Sturm Ruger  vs.  Textron

Sturm Ruger

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sturm Ruger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Textron

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Textron are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Textron may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Sturm Ruger and Textron

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

The idea behind Sturm Ruger and Textron 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .