Correlation Between CVD Equipment and Curtiss Wright
Can any of the company-specific risk be diversified away by investing in both CVD Equipment 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 CVD Equipment and Curtiss Wright into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVD Equipment and Curtiss Wright, you can compare the effects of market volatilities on CVD Equipment 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 CVD Equipment with a short position of Curtiss Wright. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVD Equipment and Curtiss Wright.
Diversification Opportunities for CVD Equipment and Curtiss Wright
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CVD and Curtiss is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CVD Equipment and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright and CVD Equipment 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 CVD Equipment 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 CVD Equipment i.e., CVD Equipment and Curtiss Wright go up and down completely randomly.
Pair Corralation between CVD Equipment and Curtiss Wright
Considering the 90-day investment horizon CVD Equipment is expected to under-perform the Curtiss Wright. In addition to that, CVD Equipment is 6.51 times more volatile than Curtiss Wright. It trades about -0.06 of its total potential returns per unit of risk. Curtiss Wright is currently generating about 0.09 per unit of volatility. If you would invest 24,925 in Curtiss Wright on January 25, 2024 and sell it today you would earn a total of 407.00 from holding Curtiss Wright or generate 1.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CVD Equipment vs. Curtiss Wright
Performance |
Timeline |
CVD Equipment |
Curtiss Wright |
CVD Equipment and Curtiss Wright Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CVD Equipment and Curtiss Wright
The main advantage of trading using opposite CVD Equipment and Curtiss Wright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVD Equipment 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.CVD Equipment vs. Standex International | CVD Equipment vs. Thermon Group Holdings | CVD Equipment vs. Enpro Industries | CVD Equipment vs. Graham |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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