Correlation Between Curtiss Wright and Zeo Energy

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

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

Diversification Opportunities for Curtiss Wright and Zeo Energy

-0.38

Correlation Coefficient

Curtiss Wright  Zeo Energy

Very good diversification

The 3 months correlation between Curtiss and Zeo is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Zeo Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zeo Energy Corp 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 Zeo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zeo Energy Corp has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Zeo Energy go up and down completely randomly.

Pair Corralation between Curtiss Wright and Zeo Energy

Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 7.83 times less return on investment than Zeo Energy. But when comparing it to its historical volatility, Curtiss Wright is 12.6 times less risky than Zeo Energy. It trades about 0.17 of its potential returns per unit of risk. Zeo Energy Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  175.00  in Zeo Energy Corp on September 13, 2024 and sell it today you would earn a total of  114.00  from holding Zeo Energy Corp or generate 65.14% return on investment over 90 days.

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

Curtiss Wright  vs.  Zeo Energy Corp

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.

Zeo Energy Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zeo Energy Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Zeo Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Curtiss Wright and Zeo Energy

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

The idea behind Curtiss Wright and Zeo Energy Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.