Correlation Between L3Harris Technologies and Curtiss Wright
Can any of the company-specific risk be diversified away by investing in both L3Harris Technologies 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 L3Harris Technologies and Curtiss Wright into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L3Harris Technologies and Curtiss Wright, you can compare the effects of market volatilities on L3Harris Technologies 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 L3Harris Technologies with a short position of Curtiss Wright. Check out your portfolio center. Please also check ongoing floating volatility patterns of L3Harris Technologies and Curtiss Wright.
Diversification Opportunities for L3Harris Technologies and Curtiss Wright
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between L3Harris and Curtiss is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding L3Harris Technologies and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright and L3Harris Technologies 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 L3Harris Technologies 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 L3Harris Technologies i.e., L3Harris Technologies and Curtiss Wright go up and down completely randomly.
Pair Corralation between L3Harris Technologies and Curtiss Wright
Considering the 90-day investment horizon L3Harris Technologies is expected to generate 3.29 times less return on investment than Curtiss Wright. But when comparing it to its historical volatility, L3Harris Technologies is 1.28 times less risky than Curtiss Wright. It trades about 0.04 of its potential returns per unit of risk. Curtiss Wright is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 35,205 in Curtiss Wright on August 23, 2024 and sell it today you would earn a total of 1,550 from holding Curtiss Wright or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
L3Harris Technologies vs. Curtiss Wright
Performance |
| Timeline |
| L3Harris Technologies |
| Curtiss Wright |
L3Harris Technologies and Curtiss Wright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L3Harris Technologies and Curtiss Wright
The main advantage of trading using opposite L3Harris Technologies and Curtiss Wright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L3Harris Technologies 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.| L3Harris Technologies vs. Lockheed Martin | L3Harris Technologies vs. General Dynamics | L3Harris Technologies vs. Raytheon Technologies Corp | L3Harris Technologies vs. Huntington Ingalls Industries |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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