Correlation Between Curtiss Wright and Wilhelmina

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

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

Diversification Opportunities for Curtiss Wright and Wilhelmina

-0.83

Correlation Coefficient

Curtiss Wright  Wilhelmina

Pay attention - limited upside

The 3 months correlation between Curtiss and Wilhelmina is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Wilhelmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilhelmina 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 Wilhelmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilhelmina has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Wilhelmina go up and down completely randomly.

Pair Corralation between Curtiss Wright and Wilhelmina

Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.32 times more return on investment than Wilhelmina. However, Curtiss Wright is 3.08 times less risky than Wilhelmina. It trades about 0.21 of its potential returns per unit of risk. Wilhelmina is currently generating about -0.07 per unit of risk. If you would invest  30,260  in Curtiss Wright on September 1, 2024 and sell it today you would earn a total of  7,103  from holding Curtiss Wright or generate 23.47% return on investment over 90 days.

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

Curtiss Wright  vs.  Wilhelmina

Curtiss Wright

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Curtiss Wright are ranked lower than 16 (%) 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.

Wilhelmina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilhelmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Curtiss Wright and Wilhelmina

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

The idea behind Curtiss Wright and Wilhelmina 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.