Correlation Between Knowles Cor and SigmaTron International
Can any of the company-specific risk be diversified away by investing in both Knowles Cor and SigmaTron International 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 Knowles Cor and SigmaTron International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and SigmaTron International, you can compare the effects of market volatilities on Knowles Cor and SigmaTron International 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 Knowles Cor with a short position of SigmaTron International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and SigmaTron International.
Diversification Opportunities for Knowles Cor and SigmaTron International
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Knowles and SigmaTron is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and SigmaTron International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SigmaTron International and Knowles Cor 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 Knowles Cor are associated (or correlated) with SigmaTron International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SigmaTron International has no effect on the direction of Knowles Cor i.e., Knowles Cor and SigmaTron International go up and down completely randomly.
Pair Corralation between Knowles Cor and SigmaTron International
Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 0.73 times more return on investment than SigmaTron International. However, Knowles Cor is 1.37 times less risky than SigmaTron International. It trades about 0.25 of its potential returns per unit of risk. SigmaTron International is currently generating about 0.08 per unit of risk. If you would invest 1,732 in Knowles Cor on September 1, 2024 and sell it today you would earn a total of 214.00 from holding Knowles Cor or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knowles Cor vs. SigmaTron International
Performance |
| Timeline |
| Knowles Cor |
| SigmaTron International |
Knowles Cor and SigmaTron International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles Cor and SigmaTron International
The main advantage of trading using opposite Knowles Cor and SigmaTron International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor position performs unexpectedly, SigmaTron International 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 SigmaTron International will offset losses from the drop in SigmaTron International's long position.| Knowles Cor vs. Mynaric AG ADR | Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat Networks |
| SigmaTron International vs. Desktop Metal | SigmaTron International vs. Fabrinet | SigmaTron International vs. Knowles Cor | SigmaTron International vs. Ubiquiti Networks |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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