Correlation Between Polaris Industries and Curtiss Motorcycles

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

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

Diversification Opportunities for Polaris Industries and Curtiss Motorcycles

-0.86

Correlation Coefficient

Polaris Industries  Curtiss Motorcycles

Pay attention - limited upside

The 3 months correlation between Polaris and Curtiss is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Industries and Curtiss Motorcycles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Motorcycles and Polaris Industries 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 Polaris Industries are associated (or correlated) with Curtiss Motorcycles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Motorcycles has no effect on the direction of Polaris Industries i.e., Polaris Industries and Curtiss Motorcycles go up and down completely randomly.

Pair Corralation between Polaris Industries and Curtiss Motorcycles

Considering the 90-day investment horizon Polaris Industries is expected to generate 0.52 times more return on investment than Curtiss Motorcycles. However, Polaris Industries is 1.92 times less risky than Curtiss Motorcycles. It trades about 0.25 of its potential returns per unit of risk. Curtiss Motorcycles is currently generating about -0.23 per unit of risk. If you would invest  3,413  in Polaris Industries on May 1, 2025 and sell it today you would earn a total of  2,368  from holding Polaris Industries or generate 69.38% return on investment over 90 days.

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

Polaris Industries  vs.  Curtiss Motorcycles

Polaris Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Polaris Industries are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, Polaris Industries demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Curtiss Motorcycles

Risk-Adjusted Performance

Very Weak

Over the last 90 days Curtiss Motorcycles has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Polaris Industries and Curtiss Motorcycles

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

The idea behind Polaris Industries and Curtiss Motorcycles 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.