Correlation Between Curtiss Wright and Babcock Wilcox
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Babcock Wilcox 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 Babcock Wilcox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Babcock Wilcox Enterprises, you can compare the effects of market volatilities on Curtiss Wright and Babcock Wilcox 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 Babcock Wilcox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Babcock Wilcox.
Diversification Opportunities for Curtiss Wright and Babcock Wilcox
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Curtiss and Babcock is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Babcock Wilcox Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock Wilcox Enter 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 Babcock Wilcox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock Wilcox Enter has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Babcock Wilcox go up and down completely randomly.
Pair Corralation between Curtiss Wright and Babcock Wilcox
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.21 times more return on investment than Babcock Wilcox. However, Curtiss Wright is 4.66 times less risky than Babcock Wilcox. It trades about 0.04 of its potential returns per unit of risk. Babcock Wilcox Enterprises is currently generating about -0.3 per unit of risk. If you would invest 24,925 in Curtiss Wright on January 24, 2024 and sell it today you would earn a total of 170.00 from holding Curtiss Wright or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Curtiss Wright vs. Babcock Wilcox Enterprises
Performance |
| Timeline |
| Curtiss Wright |
| Babcock Wilcox Enter |
Curtiss Wright and Babcock Wilcox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and Babcock Wilcox
The main advantage of trading using opposite Curtiss Wright and Babcock Wilcox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Babcock Wilcox 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 Babcock Wilcox will offset losses from the drop in Babcock Wilcox's long position.| Curtiss Wright vs. Novocure | Curtiss Wright vs. HubSpot | Curtiss Wright vs. DigitalOcean Holdings | Curtiss Wright vs. Appian Corp |
| Babcock Wilcox vs. Enerpac Tool Group | Babcock Wilcox vs. Gorman Rupp | Babcock Wilcox vs. Crane Company | Babcock Wilcox vs. Franklin Electric Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |