Correlation Between Sensata Technologies and Curtiss Wright
Can any of the company-specific risk be diversified away by investing in both Sensata 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 Sensata 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 Sensata Technologies Holding and Curtiss Wright, you can compare the effects of market volatilities on Sensata 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 Sensata Technologies with a short position of Curtiss Wright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensata Technologies and Curtiss Wright.
Diversification Opportunities for Sensata Technologies and Curtiss Wright
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sensata and Curtiss is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sensata Technologies Holding and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright and Sensata 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 Sensata Technologies Holding 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 Sensata Technologies i.e., Sensata Technologies and Curtiss Wright go up and down completely randomly.
Pair Corralation between Sensata Technologies and Curtiss Wright
Allowing for the 90-day total investment horizon Sensata Technologies Holding is expected to generate 1.8 times more return on investment than Curtiss Wright. However, Sensata Technologies is 1.8 times more volatile than Curtiss Wright. It trades about 0.26 of its potential returns per unit of risk. Curtiss Wright is currently generating about 0.32 per unit of risk. If you would invest 3,226 in Sensata Technologies Holding on February 13, 2024 and sell it today you would earn a total of 1,008 from holding Sensata Technologies Holding or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensata Technologies Holding vs. Curtiss Wright
Performance |
| Timeline |
| Sensata Technologies |
| Curtiss Wright |
Sensata Technologies and Curtiss Wright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensata Technologies and Curtiss Wright
The main advantage of trading using opposite Sensata Technologies and Curtiss Wright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensata 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.| Sensata Technologies vs. Coherent | Sensata Technologies vs. ESCO Technologies | Sensata Technologies vs. Mesa Laboratories | Sensata Technologies vs. Vishay Precision Group |
| Curtiss Wright vs. Nauticus Robotics | Curtiss Wright vs. Innovative Solutions and | Curtiss Wright vs. National Presto Industries | Curtiss Wright vs. Hexcel |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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