Correlation Between Cadre Holdings and SIFCO Industries
Can any of the company-specific risk be diversified away by investing in both Cadre Holdings and SIFCO Industries 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 Cadre Holdings and SIFCO Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadre Holdings and SIFCO Industries, you can compare the effects of market volatilities on Cadre Holdings and SIFCO Industries 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 Cadre Holdings with a short position of SIFCO Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadre Holdings and SIFCO Industries.
Diversification Opportunities for Cadre Holdings and SIFCO Industries
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cadre and SIFCO is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cadre Holdings and SIFCO Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIFCO Industries and Cadre Holdings 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 Cadre Holdings are associated (or correlated) with SIFCO Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIFCO Industries has no effect on the direction of Cadre Holdings i.e., Cadre Holdings and SIFCO Industries go up and down completely randomly.
Pair Corralation between Cadre Holdings and SIFCO Industries
Given the investment horizon of 90 days Cadre Holdings is expected to under-perform the SIFCO Industries. But the stock apears to be less risky and, when comparing its historical volatility, Cadre Holdings is 2.08 times less risky than SIFCO Industries. The stock trades about -0.54 of its potential returns per unit of risk. The SIFCO Industries is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 371.00 in SIFCO Industries on November 27, 2024 and sell it today you would lose (55.00) from holding SIFCO Industries or give up 14.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cadre Holdings vs. SIFCO Industries
Performance |
| Timeline |
| Cadre Holdings |
| SIFCO Industries |
Cadre Holdings and SIFCO Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadre Holdings and SIFCO Industries
The main advantage of trading using opposite Cadre Holdings and SIFCO Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadre Holdings position performs unexpectedly, SIFCO Industries 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 SIFCO Industries will offset losses from the drop in SIFCO Industries' long position.| Cadre Holdings vs. European Wax Center | Cadre Holdings vs. Enfusion | Cadre Holdings vs. CiT Inc | Cadre Holdings vs. Core Main |
| SIFCO Industries vs. Ducommun Incorporated | SIFCO Industries vs. Park Electrochemical | SIFCO Industries vs. National Presto Industries | SIFCO Industries vs. Astronics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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