Correlation Between Lilium NV and Curtiss Wright

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

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

Diversification Opportunities for Lilium NV and Curtiss Wright

-0.75

Correlation Coefficient

Lilium NV  Curtiss Wright

Pay attention - limited upside

The 3 months correlation between Lilium and Curtiss is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lilium NV and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright and Lilium NV 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 Lilium NV are associated (or correlated) with Curtiss Wright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Wright has no effect on the direction of Lilium NV i.e., Lilium NV and Curtiss Wright go up and down completely randomly.

Pair Corralation between Lilium NV and Curtiss Wright

Given the investment horizon of 90 days Lilium NV is expected to under-perform the Curtiss Wright. In addition to that, Lilium NV is 12.05 times more volatile than Curtiss Wright. It trades about -0.04 of its total potential returns per unit of risk. Curtiss Wright is currently generating about 0.2 per unit of volatility. If you would invest  30,260  in Curtiss Wright on September 3, 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	Weak
Accuracy	100.0%
Values	Daily Returns

Lilium NV  vs.  Curtiss Wright

Lilium NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lilium NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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.

Pair Trading with Lilium NV and Curtiss Wright

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

The idea behind Lilium NV and Curtiss Wright 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.