Correlation Between Curtiss Wright and General Dynamics
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and General Dynamics 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 General Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and General Dynamics, you can compare the effects of market volatilities on Curtiss Wright and General Dynamics 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 General Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and General Dynamics.
Diversification Opportunities for Curtiss Wright and General Dynamics
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Curtiss and General is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and General Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Dynamics 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 General Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Dynamics has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and General Dynamics go up and down completely randomly.
Pair Corralation between Curtiss Wright and General Dynamics
Allowing for the 90-day total investment horizon Curtiss Wright is expected to under-perform the General Dynamics. In addition to that, Curtiss Wright is 2.01 times more volatile than General Dynamics. It trades about -0.08 of its total potential returns per unit of risk. General Dynamics is currently generating about -0.11 per unit of volatility. If you would invest 27,498 in General Dynamics on December 1, 2024 and sell it today you would lose (2,238) from holding General Dynamics or give up 8.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Curtiss Wright vs. General Dynamics
Performance |
Timeline |
Curtiss Wright |
General Dynamics |
Curtiss Wright and General Dynamics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Curtiss Wright and General Dynamics
The main advantage of trading using opposite Curtiss Wright and General Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, General Dynamics 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 General Dynamics will offset losses from the drop in General Dynamics' long position.Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. AAR Corp | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Moog Inc |
General Dynamics vs. Lockheed Martin | General Dynamics vs. Raytheon Technologies Corp | General Dynamics vs. L3Harris Technologies | General Dynamics vs. Huntington Ingalls Industries |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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