Correlation Between Triumph and Curtiss Wright

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

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

Diversification Opportunities for Triumph and Curtiss Wright

0.66

Correlation Coefficient

Triumph  Curtiss Wright

Poor diversification

The 3 months correlation between Triumph and Curtiss is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Group and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright and Triumph 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 Triumph Group 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 Triumph i.e., Triumph and Curtiss Wright go up and down completely randomly.

Pair Corralation between Triumph and Curtiss Wright

Considering the 90-day investment horizon Triumph Group is expected to generate 0.94 times more return on investment than Curtiss Wright. However, Triumph Group is 1.06 times less risky than Curtiss Wright. It trades about -0.03 of its potential returns per unit of risk. Curtiss Wright is currently generating about -0.1 per unit of risk. If you would invest  1,891  in Triumph Group on October 8, 2024 and sell it today you would lose (34.00) from holding Triumph Group or give up 1.8% of portfolio value over 90 days.

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

Triumph Group  vs.  Curtiss Wright

Triumph Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Triumph Group are ranked lower than 15 (%) 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.

Curtiss Wright

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Curtiss Wright are ranked lower than 2 (%) 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.

Pair Trading with Triumph and Curtiss Wright

The main advantage of trading using opposite Triumph and Curtiss Wright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triumph 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 Triumph Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.