Correlation Between Raytheon Technologies and Curtiss Wright
Can any of the company-specific risk be diversified away by investing in both Raytheon 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 Raytheon 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 Raytheon Technologies Corp and Curtiss Wright, you can compare the effects of market volatilities on Raytheon 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 Raytheon Technologies with a short position of Curtiss Wright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytheon Technologies and Curtiss Wright.
Diversification Opportunities for Raytheon Technologies and Curtiss Wright
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Raytheon and Curtiss is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Raytheon Technologies Corp and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright and Raytheon 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 Raytheon Technologies Corp 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 Raytheon Technologies i.e., Raytheon Technologies and Curtiss Wright go up and down completely randomly.
Pair Corralation between Raytheon Technologies and Curtiss Wright
Considering the 90-day investment horizon Raytheon Technologies Corp is expected to under-perform the Curtiss Wright. But the stock apears to be less risky and, when comparing its historical volatility, Raytheon Technologies Corp is 1.49 times less risky than Curtiss Wright. The stock trades about -0.14 of its potential returns per unit of risk. The Curtiss Wright is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 35,017 in Curtiss Wright on August 24, 2024 and sell it today you would earn a total of 1,738 from holding Curtiss Wright or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raytheon Technologies Corp vs. Curtiss Wright
Performance |
| Timeline |
| Raytheon Technologies |
| Curtiss Wright |
Raytheon Technologies and Curtiss Wright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raytheon Technologies and Curtiss Wright
The main advantage of trading using opposite Raytheon Technologies and Curtiss Wright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytheon 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.| Raytheon Technologies vs. Northrop Grumman | Raytheon Technologies vs. General Dynamics | Raytheon Technologies vs. The Boeing | Raytheon Technologies vs. L3Harris Technologies |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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