Correlation Between National Presto and Woodward

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

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

Diversification Opportunities for National Presto and Woodward

0.87

Correlation Coefficient

National Presto  Woodward

Very poor diversification

The 3 months correlation between National and Woodward is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding National Presto Industries and Woodward in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodward and National Presto 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 National Presto Industries are associated (or correlated) with Woodward. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodward has no effect on the direction of National Presto i.e., National Presto and Woodward go up and down completely randomly.

Pair Corralation between National Presto and Woodward

Considering the 90-day investment horizon National Presto is expected to generate 1.55 times less return on investment than Woodward. In addition to that, National Presto is 1.53 times more volatile than Woodward. It trades about 0.14 of its total potential returns per unit of risk. Woodward is currently generating about 0.33 per unit of volatility. If you would invest  19,395  in Woodward on May 7, 2025 and sell it today you would earn a total of  6,592  from holding Woodward or generate 33.99% return on investment over 90 days.

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

National Presto Industries  vs.  Woodward

National Presto Indu

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Presto Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, National Presto disclosed solid returns over the last few months and may actually be approaching a breakup point.

Woodward

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Woodward are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Woodward exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Presto and Woodward

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

The idea behind National Presto Industries and Woodward 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 Stocks Directory module to find actively traded stocks across global markets.