Correlation Between Curtiss Wright and Copart
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Copart 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 Copart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Copart Inc, you can compare the effects of market volatilities on Curtiss Wright and Copart 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 Copart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Copart.
Diversification Opportunities for Curtiss Wright and Copart
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Curtiss and Copart is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Copart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copart Inc 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 Copart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copart Inc has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Copart go up and down completely randomly.
Pair Corralation between Curtiss Wright and Copart
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 3.25 times less return on investment than Copart. But when comparing it to its historical volatility, Curtiss Wright is 1.17 times less risky than Copart. It trades about 0.14 of its potential returns per unit of risk. Copart Inc is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 5,185 in Copart Inc on August 28, 2024 and sell it today you would earn a total of 1,195 from holding Copart Inc or generate 23.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Wright vs. Copart Inc
Performance |
| Timeline |
| Curtiss Wright |
| Copart Inc |
Curtiss Wright and Copart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and Copart
The main advantage of trading using opposite Curtiss Wright and Copart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Copart 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 Copart will offset losses from the drop in Copart's long position.| Curtiss Wright vs. Sidus Space | Curtiss Wright vs. Rocket Lab USA | Curtiss Wright vs. Momentus | Curtiss Wright vs. Planet Labs PBC |
| Copart vs. Park Electrochemical | Copart vs. Innovative Solutions and | Copart vs. Curtiss Wright | Copart vs. National Presto Industries |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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