Correlation Between Curtiss Wright and Mercury Systems
Can any of the company-specific risk be diversified away by investing in both Curtiss Wright and Mercury Systems 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 Mercury Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Wright and Mercury Systems, you can compare the effects of market volatilities on Curtiss Wright and Mercury Systems 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 Mercury Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Wright and Mercury Systems.
Diversification Opportunities for Curtiss Wright and Mercury Systems
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Curtiss and Mercury is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Wright and Mercury Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercury Systems 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 Mercury Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercury Systems has no effect on the direction of Curtiss Wright i.e., Curtiss Wright and Mercury Systems go up and down completely randomly.
Pair Corralation between Curtiss Wright and Mercury Systems
Allowing for the 90-day total investment horizon Curtiss Wright is expected to generate 0.59 times more return on investment than Mercury Systems. However, Curtiss Wright is 1.7 times less risky than Mercury Systems. It trades about 0.12 of its potential returns per unit of risk. Mercury Systems is currently generating about 0.04 per unit of risk. If you would invest 17,465 in Curtiss Wright on March 9, 2025 and sell it today you would earn a total of 27,787 from holding Curtiss Wright or generate 159.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Wright vs. Mercury Systems
Performance |
| Timeline |
| Curtiss Wright |
| Mercury Systems |
Curtiss Wright and Mercury Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Wright and Mercury Systems
The main advantage of trading using opposite Curtiss Wright and Mercury Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Wright position performs unexpectedly, Mercury Systems 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 Mercury Systems will offset losses from the drop in Mercury Systems' long position.| Curtiss Wright vs. Mercury Systems | Curtiss Wright vs. AAR Corp | Curtiss Wright vs. Ducommun Incorporated | Curtiss Wright vs. Moog Inc |
| Mercury Systems vs. Curtiss Wright | Mercury Systems vs. Hexcel | Mercury Systems vs. Ducommun Incorporated | Mercury Systems 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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