Correlation Between Curtiss Wright and Draganfly

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

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

Diversification Opportunities for Curtiss Wright and Draganfly

0.74

Correlation Coefficient

Curtiss Wright  Draganfly

Poor diversification

The 3 months correlation between Curtiss and Draganfly is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Draganfly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Draganfly 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 Draganfly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Draganfly has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Draganfly go up and down completely randomly.

Pair Corralation between Curtiss Wright and Draganfly

Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.38 times more return on investment than Draganfly. However, Curtiss Wright is 2.61 times less risky than Draganfly. It trades about -0.05 of its potential returns per unit of risk. Draganfly is currently generating about -0.04 per unit of risk. If you would invest  35,044  in Curtiss Wright on January 11, 2025 and sell it today you would lose (3,723) from holding Curtiss Wright or give up 10.62% of portfolio value over 90 days.

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

Curtiss Wright  vs.  Draganfly

Curtiss Wright

Risk-Adjusted Performance

Very Weak

Over the last 90 days Curtiss Wright has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Draganfly

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Curtiss Wright and Draganfly

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

The idea behind Curtiss Wright and Draganfly 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.