Correlation Between Curtiss Wright and CompoSecure
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and CompoSecure 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 CompoSecure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and CompoSecure, you can compare the effects of market volatilities on Curtiss Wright and CompoSecure 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 CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and CompoSecure.
Diversification Opportunities for Curtiss Wright and CompoSecure
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Curtiss and CompoSecure is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure 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 CompoSecure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompoSecure has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and CompoSecure go up and down completely randomly.
Pair Corralation between Curtiss Wright and CompoSecure
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 1.78 times less return on investment than CompoSecure. But when comparing it to its historical volatility, Curtiss Wright is 2.36 times less risky than CompoSecure. It trades about 0.5 of its potential returns per unit of risk. CompoSecure is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 344.00 in CompoSecure on April 19, 2025 and sell it today you would earn a total of 367.00 from holding CompoSecure or generate 106.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Wright vs. CompoSecure
Performance |
| Timeline |
| Curtiss Wright |
| CompoSecure |
Curtiss Wright and CompoSecure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and CompoSecure
The main advantage of trading using opposite Curtiss Wright and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, CompoSecure 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 CompoSecure will offset losses from the drop in CompoSecure's long position.| Curtiss Wright vs. Hexcel | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. Woodward |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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