Correlation Between Curtiss Wright and Sidus Space

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

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

Diversification Opportunities for Curtiss Wright and Sidus Space

-0.3

Correlation Coefficient

Curtiss Wright  Sidus Space

Very good diversification

The 3 months correlation between Curtiss and Sidus is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Sidus Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidus Space 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 Sidus Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidus Space has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Sidus Space go up and down completely randomly.

Pair Corralation between Curtiss Wright and Sidus Space

Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.14 times more return on investment than Sidus Space. However, Curtiss Wright is 7.02 times less risky than Sidus Space. It trades about -0.26 of its potential returns per unit of risk. Sidus Space is currently generating about -0.14 per unit of risk. If you would invest  38,502  in Curtiss Wright on October 15, 2024 and sell it today you would lose (3,484) from holding Curtiss Wright or give up 9.05% of portfolio value over 90 days.

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

Curtiss Wright  vs.  Sidus Space

Curtiss Wright

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Curtiss Wright are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Curtiss Wright is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sidus Space

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sidus Space are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Sidus Space unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Curtiss Wright and Sidus Space

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

The idea behind Curtiss Wright and Sidus Space 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.