Correlation Between Curtiss Wright and Deluxe
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Deluxe 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 Deluxe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Deluxe, you can compare the effects of market volatilities on Curtiss Wright and Deluxe 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 Deluxe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Deluxe.
Diversification Opportunities for Curtiss Wright and Deluxe
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Curtiss and Deluxe is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Deluxe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deluxe 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 Deluxe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deluxe has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Deluxe go up and down completely randomly.
Pair Corralation between Curtiss Wright and Deluxe
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 3.84 times less return on investment than Deluxe. But when comparing it to its historical volatility, Curtiss Wright is 1.41 times less risky than Deluxe. It trades about 0.11 of its potential returns per unit of risk. Deluxe is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,897 in Deluxe on August 30, 2024 and sell it today you would earn a total of 430.00 from holding Deluxe or generate 22.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Curtiss Wright vs. Deluxe
Performance |
| Timeline |
| Curtiss Wright |
| Deluxe |
Curtiss Wright and Deluxe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and Deluxe
The main advantage of trading using opposite Curtiss Wright and Deluxe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Deluxe 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 Deluxe will offset losses from the drop in Deluxe's long position.| Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. AAR Corp | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Moog Inc |
| Deluxe vs. MSA Safety | Deluxe vs. Resideo Technologies | Deluxe vs. Mistras Group | Deluxe vs. NL 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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