Correlation Between Curtiss Wright and Triumph
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Triumph 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 Triumph into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Triumph Group, you can compare the effects of market volatilities on Curtiss Wright and Triumph 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 Triumph. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Triumph.
Diversification Opportunities for Curtiss Wright and Triumph
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Curtiss and Triumph is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Triumph Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Group 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 Triumph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Group has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Triumph go up and down completely randomly.
Pair Corralation between Curtiss Wright and Triumph
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.34 times more return on investment than Triumph. However, Curtiss Wright is 2.93 times less risky than Triumph. It trades about 0.16 of its potential returns per unit of risk. Triumph Group is currently generating about 0.05 per unit of risk. If you would invest 18,207 in Curtiss Wright on August 28, 2024 and sell it today you would earn a total of 18,931 from holding Curtiss Wright or generate 103.98% 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. Triumph Group
Performance |
| Timeline |
| Curtiss Wright |
| Triumph Group |
Curtiss Wright and Triumph Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and Triumph
The main advantage of trading using opposite Curtiss Wright and Triumph positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Triumph 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 Triumph will offset losses from the drop in Triumph's long position.| Curtiss Wright vs. Sidus Space | Curtiss Wright vs. Rocket Lab USA | Curtiss Wright vs. Momentus | Curtiss Wright vs. Planet Labs PBC |
| Triumph vs. Mercury Systems | Triumph vs. Curtiss Wright | Triumph vs. Hexcel | Triumph vs. Ducommun Incorporated |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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