Correlation Between Curtiss Wright and CPI Aerostructures
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and CPI Aerostructures 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 CPI Aerostructures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and CPI Aerostructures, you can compare the effects of market volatilities on Curtiss Wright and CPI Aerostructures 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 CPI Aerostructures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and CPI Aerostructures.
Diversification Opportunities for Curtiss Wright and CPI Aerostructures
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Curtiss and CPI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and CPI Aerostructures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPI Aerostructures 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 CPI Aerostructures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPI Aerostructures has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and CPI Aerostructures go up and down completely randomly.
Pair Corralation between Curtiss Wright and CPI Aerostructures
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 3.4 times less return on investment than CPI Aerostructures. But when comparing it to its historical volatility, Curtiss Wright is 2.24 times less risky than CPI Aerostructures. It trades about 0.1 of its potential returns per unit of risk. CPI Aerostructures is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 322.00 in CPI Aerostructures on August 23, 2024 and sell it today you would earn a total of 48.00 from holding CPI Aerostructures or generate 14.91% 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. CPI Aerostructures
Performance |
| Timeline |
| Curtiss Wright |
| CPI Aerostructures |
Curtiss Wright and CPI Aerostructures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and CPI Aerostructures
The main advantage of trading using opposite Curtiss Wright and CPI Aerostructures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, CPI Aerostructures 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 CPI Aerostructures will offset losses from the drop in CPI Aerostructures' long position.| Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. AAR Corp | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Moog Inc |
| CPI Aerostructures vs. Small Cap Core | CPI Aerostructures vs. Freedom Holding Corp | CPI Aerostructures vs. Gfl Environmental Holdings | CPI Aerostructures vs. Growth Fund Of |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |