Correlation Between Curtiss Wright and Fidelity Advisor

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

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

Diversification Opportunities for Curtiss Wright and Fidelity Advisor

0.91

Correlation Coefficient

Curtiss Wright  Fidelity Advisor

Almost no diversification

The 3 months correlation between Curtiss and Fidelity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Fidelity Advisor Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Ind 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Ind has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Curtiss Wright and Fidelity Advisor

Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 1.6 times more return on investment than Fidelity Advisor. However, Curtiss Wright is 1.6 times more volatile than Fidelity Advisor Industrials. It trades about 0.17 of its potential returns per unit of risk. Fidelity Advisor Industrials is currently generating about 0.15 per unit of risk. If you would invest  30,957  in Curtiss Wright on September 13, 2024 and sell it today you would earn a total of  5,778  from holding Curtiss Wright or generate 18.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Curtiss Wright  vs.  Fidelity Advisor Industrials

Curtiss Wright

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Curtiss Wright are ranked lower than 13 (%) 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.

Fidelity Advisor Ind

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Industrials are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Curtiss Wright and Fidelity Advisor

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

The idea behind Curtiss Wright and Fidelity Advisor Industrials 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.