Correlation Between Curtiss Wright and New Horizon
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and New Horizon 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 New Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and New Horizon Aircraft, you can compare the effects of market volatilities on Curtiss Wright and New Horizon 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 New Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and New Horizon.
Diversification Opportunities for Curtiss Wright and New Horizon
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Curtiss and New is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and New Horizon Aircraft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Horizon Aircraft 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 New Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Horizon Aircraft has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and New Horizon go up and down completely randomly.
Pair Corralation between Curtiss Wright and New Horizon
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.12 times more return on investment than New Horizon. However, Curtiss Wright is 8.07 times less risky than New Horizon. It trades about 0.18 of its potential returns per unit of risk. New Horizon Aircraft is currently generating about -0.05 per unit of risk. If you would invest 19,555 in Curtiss Wright on August 24, 2024 and sell it today you would earn a total of 17,527 from holding Curtiss Wright or generate 89.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Wright vs. New Horizon Aircraft
Performance |
| Timeline |
| Curtiss Wright |
| New Horizon Aircraft |
Curtiss Wright and New Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and New Horizon
The main advantage of trading using opposite Curtiss Wright and New Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, New Horizon 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 New Horizon will offset losses from the drop in New Horizon's long position.| Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. AAR Corp | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Moog Inc |
| New Horizon vs. BW Offshore Limited | New Horizon vs. Fortress Transp Infra | New Horizon vs. Hertz Global Holdings | New Horizon vs. WT Offshore |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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