Correlation Between Huntington Ingalls and Hess

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

Diversification Opportunities for Huntington Ingalls and Hess

0.87

Correlation Coefficient

Huntington Ingalls  Hess

Very poor diversification

The 3 months correlation between Huntington and Hess is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Ingalls Industries, and Hess Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hess 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 Hess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hess has no effect on the direction of Huntington Ingalls i.e., Huntington Ingalls and Hess go up and down completely randomly.

Pair Corralation between Huntington Ingalls and Hess

Assuming the 90 days trading horizon Huntington Ingalls Industries, is expected to generate 2.27 times more return on investment than Hess. However, Huntington Ingalls is 2.27 times more volatile than Hess Corporation. It trades about 0.22 of its potential returns per unit of risk. Hess Corporation is currently generating about 0.17 per unit of risk. If you would invest  1,593  in Huntington Ingalls Industries, on April 24, 2025 and sell it today you would earn a total of  267.00  from holding Huntington Ingalls Industries, or generate 16.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Huntington Ingalls Industries,  vs.  Hess Corp.

Huntington Ingalls

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Ingalls Industries, are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Huntington Ingalls sustained solid returns over the last few months and may actually be approaching a breakup point.

Hess

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hess Corporation are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Hess is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Huntington Ingalls and Hess

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

The idea behind Huntington Ingalls Industries, and Hess Corporation 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.