Correlation Between Howmet Aerospace and Curtiss Wright
Can any of the company-specific risk be diversified away by investing in both Howmet Aerospace and Curtiss Wright 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 Howmet Aerospace and Curtiss Wright into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Howmet Aerospace and Curtiss Wright, you can compare the effects of market volatilities on Howmet Aerospace and Curtiss Wright 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 Howmet Aerospace with a short position of Curtiss Wright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Howmet Aerospace and Curtiss Wright.
Diversification Opportunities for Howmet Aerospace and Curtiss Wright
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Howmet and Curtiss is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Howmet Aerospace and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright and Howmet Aerospace 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 Howmet Aerospace are associated (or correlated) with Curtiss Wright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Wright has no effect on the direction of Howmet Aerospace i.e., Howmet Aerospace and Curtiss Wright go up and down completely randomly.
Pair Corralation between Howmet Aerospace and Curtiss Wright
Considering the 90-day investment horizon Howmet Aerospace is expected to generate 1.41 times more return on investment than Curtiss Wright. However, Howmet Aerospace is 1.41 times more volatile than Curtiss Wright. It trades about 0.2 of its potential returns per unit of risk. Curtiss Wright is currently generating about 0.1 per unit of risk. If you would invest 10,258 in Howmet Aerospace on August 23, 2024 and sell it today you would earn a total of 1,440 from holding Howmet Aerospace or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Howmet Aerospace vs. Curtiss Wright
Performance |
| Timeline |
| Howmet Aerospace |
| Curtiss Wright |
Howmet Aerospace and Curtiss Wright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Howmet Aerospace and Curtiss Wright
The main advantage of trading using opposite Howmet Aerospace and Curtiss Wright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Howmet Aerospace position performs unexpectedly, Curtiss Wright 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 Curtiss Wright will offset losses from the drop in Curtiss Wright's long position.| Howmet Aerospace vs. Curtiss Wright | Howmet Aerospace vs. Mercury Systems | Howmet Aerospace vs. AAR Corp | Howmet Aerospace vs. Ducommun Incorporated |
| Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. AAR Corp | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Moog Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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