Correlation Between Curtiss Wright and Elbit Systems
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Elbit Systems 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 Elbit Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Elbit Systems, you can compare the effects of market volatilities on Curtiss Wright and Elbit Systems 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 Elbit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Elbit Systems.
Diversification Opportunities for Curtiss Wright and Elbit Systems
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Curtiss and Elbit is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Elbit Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Systems 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 Elbit Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Systems has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Elbit Systems go up and down completely randomly.
Pair Corralation between Curtiss Wright and Elbit Systems
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.89 times more return on investment than Elbit Systems. However, Curtiss Wright is 1.13 times less risky than Elbit Systems. It trades about 0.12 of its potential returns per unit of risk. Elbit Systems is currently generating about 0.06 per unit of risk. If you would invest 16,857 in Curtiss Wright on August 30, 2024 and sell it today you would earn a total of 20,280 from holding Curtiss Wright or generate 120.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Wright vs. Elbit Systems
Performance |
| Timeline |
| Curtiss Wright |
| Elbit Systems |
Curtiss Wright and Elbit Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and Elbit Systems
The main advantage of trading using opposite Curtiss Wright and Elbit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Elbit Systems 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 Elbit Systems will offset losses from the drop in Elbit Systems' long position.| Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. AAR Corp | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Moog Inc |
| Elbit Systems vs. Mercury Systems | Elbit Systems vs. Triumph Group | Elbit Systems vs. CAE Inc | Elbit Systems vs. AAR Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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