Correlation Between Curtiss Wright and Triumph

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

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

Diversification Opportunities for Curtiss Wright and Triumph

-0.73

Correlation Coefficient

Curtiss Wright  Triumph

Pay attention - limited upside

The 3 months correlation between Curtiss and Triumph is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Triumph Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Group 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 Triumph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Group has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Triumph go up and down completely randomly.

Pair Corralation between Curtiss Wright and Triumph

Allowing for the 90-day total investment horizon Curtiss Wright is expected to under-perform the Triumph. But the stock apears to be less risky and, when comparing its historical volatility, Curtiss Wright is 1.91 times less risky than Triumph. The stock trades about -0.06 of its potential returns per unit of risk. The Triumph Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,865  in Triumph Group on December 29, 2024 and sell it today you would earn a total of  678.00  from holding Triumph Group or generate 36.35% 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.  Triumph Group

Curtiss Wright

Risk-Adjusted Performance

Very Weak

Over the last 90 days Curtiss Wright has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Triumph Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Triumph Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Triumph demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Curtiss Wright and Triumph

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

The idea behind Curtiss Wright and Triumph Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.