Correlation Between National Presto and SIFCO Industries
Can any of the company-specific risk be diversified away by investing in both National Presto 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 National Presto and SIFCO Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Presto Industries and SIFCO Industries, you can compare the effects of market volatilities on National Presto 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 National Presto with a short position of SIFCO Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Presto and SIFCO Industries.
Diversification Opportunities for National Presto and SIFCO Industries
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and SIFCO is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding National Presto Industries and SIFCO Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIFCO Industries and National Presto 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 National Presto Industries 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 National Presto i.e., National Presto and SIFCO Industries go up and down completely randomly.
Pair Corralation between National Presto and SIFCO Industries
Considering the 90-day investment horizon National Presto Industries is expected to generate 0.52 times more return on investment than SIFCO Industries. However, National Presto Industries is 1.91 times less risky than SIFCO Industries. It trades about 0.09 of its potential returns per unit of risk. SIFCO Industries is currently generating about -0.1 per unit of risk. If you would invest 7,425 in National Presto Industries on August 26, 2024 and sell it today you would earn a total of 442.00 from holding National Presto Industries or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Presto Industries vs. SIFCO Industries
Performance |
| Timeline |
| National Presto Indu |
| SIFCO Industries |
National Presto and SIFCO Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Presto and SIFCO Industries
The main advantage of trading using opposite National Presto and SIFCO Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Presto 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.| National Presto vs. Park Electrochemical | National Presto vs. Ducommun Incorporated | National Presto vs. Innovative Solutions and | National Presto vs. VSE Corporation |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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