Correlation Between Curtiss Wright and Beacon Roofing
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Beacon Roofing 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 Wright and Beacon Roofing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Beacon Roofing Supply, you can compare the effects of market volatilities on Curtiss Wright and Beacon Roofing 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 Wright with a short position of Beacon Roofing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Beacon Roofing.
Diversification Opportunities for Curtiss Wright and Beacon Roofing
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Curtiss and Beacon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Beacon Roofing Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beacon Roofing Supply and Curtiss Wright 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 Wright are associated (or correlated) with Beacon Roofing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beacon Roofing Supply has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Beacon Roofing go up and down completely randomly.
Pair Corralation between Curtiss Wright and Beacon Roofing
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 1.2 times less return on investment than Beacon Roofing. But when comparing it to its historical volatility, Curtiss Wright is 1.17 times less risky than Beacon Roofing. It trades about 0.09 of its potential returns per unit of risk. Beacon Roofing Supply is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,724 in Beacon Roofing Supply on January 15, 2025 and sell it today you would earn a total of 6,614 from holding Beacon Roofing Supply or generate 115.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Wright vs. Beacon Roofing Supply
Performance |
| Timeline |
| Curtiss Wright |
| Beacon Roofing Supply |
Curtiss Wright and Beacon Roofing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and Beacon Roofing
The main advantage of trading using opposite Curtiss Wright and Beacon Roofing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Beacon Roofing 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 Beacon Roofing will offset losses from the drop in Beacon Roofing's long position.| Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. AAR Corp | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Moog Inc |
| Beacon Roofing vs. Quanex Building Products | Beacon Roofing vs. Gibraltar Industries | Beacon Roofing vs. Armstrong World Industries | Beacon Roofing vs. Janus International Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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