Correlation Between Curtiss Wright and Ingersoll Rand
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Ingersoll Rand 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 Ingersoll Rand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Ingersoll Rand, you can compare the effects of market volatilities on Curtiss Wright and Ingersoll Rand 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 Ingersoll Rand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Ingersoll Rand.
Diversification Opportunities for Curtiss Wright and Ingersoll Rand
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Curtiss and Ingersoll is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Ingersoll Rand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingersoll Rand 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 Ingersoll Rand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingersoll Rand has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Ingersoll Rand go up and down completely randomly.
Pair Corralation between Curtiss Wright and Ingersoll Rand
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.7 times more return on investment than Ingersoll Rand. However, Curtiss Wright is 1.43 times less risky than Ingersoll Rand. It trades about 0.04 of its potential returns per unit of risk. Ingersoll Rand is currently generating about -0.08 per unit of risk. If you would invest 25,101 in Curtiss Wright on January 26, 2024 and sell it today you would earn a total of 163.00 from holding Curtiss Wright or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Wright vs. Ingersoll Rand
Performance |
| Timeline |
| Curtiss Wright |
| Ingersoll Rand |
Curtiss Wright and Ingersoll Rand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and Ingersoll Rand
The main advantage of trading using opposite Curtiss Wright and Ingersoll Rand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Ingersoll Rand 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 Ingersoll Rand will offset losses from the drop in Ingersoll Rand's long position.| Curtiss Wright vs. Kaman | Curtiss Wright vs. Innovative Solutions and | Curtiss Wright vs. National Presto Industries | Curtiss Wright vs. Hexcel |
| Ingersoll Rand vs. Parker Hannifin | Ingersoll Rand vs. Emerson Electric | Ingersoll Rand vs. Smith AO | Ingersoll Rand vs. Watts Water Technologies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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