Correlation Between Curtiss Wright and Ducommun Incorporated
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Ducommun Incorporated 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 Ducommun Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Ducommun Incorporated, you can compare the effects of market volatilities on Curtiss Wright and Ducommun Incorporated 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 Ducommun Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Ducommun Incorporated.
Diversification Opportunities for Curtiss Wright and Ducommun Incorporated
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Curtiss and Ducommun is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Ducommun Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducommun Incorporated 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 Ducommun Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducommun Incorporated has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Ducommun Incorporated go up and down completely randomly.
Pair Corralation between Curtiss Wright and Ducommun Incorporated
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 1.01 times more return on investment than Ducommun Incorporated. However, Curtiss Wright is 1.01 times more volatile than Ducommun Incorporated. It trades about 0.16 of its potential returns per unit of risk. Ducommun Incorporated is currently generating about 0.15 per unit of risk. If you would invest 34,548 in Curtiss Wright on August 26, 2024 and sell it today you would earn a total of 2,534 from holding Curtiss Wright or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Wright vs. Ducommun Incorporated
Performance |
| Timeline |
| Curtiss Wright |
| Ducommun Incorporated |
Curtiss Wright and Ducommun Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and Ducommun Incorporated
The main advantage of trading using opposite Curtiss Wright and Ducommun Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Ducommun Incorporated 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 Ducommun Incorporated will offset losses from the drop in Ducommun Incorporated's long position.| Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. AAR Corp | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Moog Inc |
| Ducommun Incorporated vs. Innovative Solutions and | Ducommun Incorporated vs. National Presto Industries | Ducommun Incorporated vs. Astronics | Ducommun Incorporated vs. Park Electrochemical |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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