Correlation Between Curtiss Wright and Beam Global

Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Beam Global 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 Beam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Curtiss Wright and Beam Global, you can compare the effects of market volatilities on Curtiss Wright and Beam Global 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 Beam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Beam Global.

Diversification Opportunities for Curtiss Wright and Beam Global

-0.63

Correlation Coefficient

Curtiss Wright  Beam Global

Excellent diversification

The 3 months correlation between Curtiss and Beam is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Beam Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beam Global 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 Beam Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beam Global has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Beam Global go up and down completely randomly.

Pair Corralation between Curtiss Wright and Beam Global

Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.5 times more return on investment than Beam Global. However, Curtiss Wright is 1.99 times less risky than Beam Global. It trades about 0.16 of its potential returns per unit of risk. Beam Global is currently generating about -0.3 per unit of risk. If you would invest  31,201  in Curtiss Wright on September 14, 2024 and sell it today you would earn a total of  5,426  from holding Curtiss Wright or generate 17.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Curtiss Wright  vs.  Beam Global

Curtiss Wright

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Curtiss Wright are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Curtiss Wright showed solid returns over the last few months and may actually be approaching a breakup point.

Beam Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beam Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Curtiss Wright and Beam Global

The main advantage of trading using opposite Curtiss Wright and Beam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Beam Global 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 Beam Global will offset losses from the drop in Beam Global's long position.

The idea behind Curtiss Wright and Beam Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.