Correlation Between Curtiss Motorcycles and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Curtiss Motorcycles and Dow Jones 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 Curtiss Motorcycles and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Motorcycles and Dow Jones Industrial, you can compare the effects of market volatilities on Curtiss Motorcycles and Dow Jones 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 Curtiss Motorcycles with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Motorcycles and Dow Jones.
Diversification Opportunities for Curtiss Motorcycles and Dow Jones
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Curtiss and Dow is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Motorcycles and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Curtiss Motorcycles 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 Curtiss Motorcycles are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Curtiss Motorcycles i.e., Curtiss Motorcycles and Dow Jones go up and down completely randomly.
Pair Corralation between Curtiss Motorcycles and Dow Jones
Given the investment horizon of 90 days Curtiss Motorcycles is expected to generate 99.33 times more return on investment than Dow Jones. However, Curtiss Motorcycles is 99.33 times more volatile than Dow Jones Industrial. It trades about 0.07 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 13.00 in Curtiss Motorcycles on August 31, 2024 and sell it today you would lose (10.70) from holding Curtiss Motorcycles or give up 82.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Curtiss Motorcycles vs. Dow Jones Industrial
Performance |
| Timeline |
Curtiss Motorcycles and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Curtiss Motorcycles
Pair trading matchups for Curtiss Motorcycles
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Curtiss Motorcycles and Dow Jones
The main advantage of trading using opposite Curtiss Motorcycles and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Motorcycles position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Curtiss Motorcycles vs. Life Electric Vehicles | Curtiss Motorcycles vs. Evil Empire Designs | Curtiss Motorcycles vs. Twin Vee Powercats | Curtiss Motorcycles vs. LCI Industries |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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