Correlation Between Howmet Aerospace and Curtiss Wright

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

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

Diversification Opportunities for Howmet Aerospace and Curtiss Wright

0.94

Correlation Coefficient

Howmet Aerospace  Curtiss Wright

Almost no diversification

The 3 months correlation between Howmet and Curtiss is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Howmet Aerospace and Curtiss Wright in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Wright and Howmet Aerospace 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 Howmet Aerospace 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 Howmet Aerospace i.e., Howmet Aerospace and Curtiss Wright go up and down completely randomly.

Pair Corralation between Howmet Aerospace and Curtiss Wright

Considering the 90-day investment horizon Howmet Aerospace is expected to generate 1.73 times less return on investment than Curtiss Wright. In addition to that, Howmet Aerospace is 1.21 times more volatile than Curtiss Wright. It trades about 0.18 of its total potential returns per unit of risk. Curtiss Wright is currently generating about 0.37 per unit of volatility. If you would invest  35,975  in Curtiss Wright on May 5, 2025 and sell it today you would earn a total of  13,383  from holding Curtiss Wright or generate 37.2% return on investment over 90 days.

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

Howmet Aerospace  vs.  Curtiss Wright

Howmet Aerospace

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Howmet Aerospace are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Howmet Aerospace displayed solid returns over the last few months and may actually be approaching a breakup point.

Curtiss Wright

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Curtiss Wright are ranked lower than 28 (%) 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 Howmet Aerospace and Curtiss Wright

The main advantage of trading using opposite Howmet Aerospace and Curtiss Wright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Howmet Aerospace 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 Howmet Aerospace 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.