Correlation Between Curtiss Wright and Hillenbrand
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Hillenbrand 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 Hillenbrand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Hillenbrand, you can compare the effects of market volatilities on Curtiss Wright and Hillenbrand 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 Hillenbrand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Hillenbrand.
Diversification Opportunities for Curtiss Wright and Hillenbrand
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Curtiss and Hillenbrand is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Hillenbrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillenbrand 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 Hillenbrand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillenbrand has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Hillenbrand go up and down completely randomly.
Pair Corralation between Curtiss Wright and Hillenbrand
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.31 times more return on investment than Hillenbrand. However, Curtiss Wright is 3.2 times less risky than Hillenbrand. It trades about 0.16 of its potential returns per unit of risk. Hillenbrand is currently generating about -0.15 per unit of risk. If you would invest 25,892 in Curtiss Wright on February 6, 2024 and sell it today you would earn a total of 925.00 from holding Curtiss Wright or generate 3.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Curtiss Wright vs. Hillenbrand
Performance |
Timeline |
Curtiss Wright |
Hillenbrand |
Curtiss Wright and Hillenbrand Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Curtiss Wright and Hillenbrand
The main advantage of trading using opposite Curtiss Wright and Hillenbrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Hillenbrand 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 Hillenbrand will offset losses from the drop in Hillenbrand's long position.Curtiss Wright vs. Novocure | Curtiss Wright vs. HubSpot | Curtiss Wright vs. DigitalOcean Holdings | Curtiss Wright vs. Appian Corp |
Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
Check out your portfolio center.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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