Correlation Between NYSE Composite and SigmaTron International
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and SigmaTron International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SigmaTron International, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of SigmaTron International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SigmaTron International.
Diversification Opportunities for NYSE Composite and SigmaTron International
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and SigmaTron is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SigmaTron International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SigmaTron International and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and SigmaTron International go up and down completely randomly.
Pair Corralation between NYSE Composite and SigmaTron International
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.22 times more return on investment than SigmaTron International. However, NYSE Composite is 4.52 times less risky than SigmaTron International. It trades about 0.21 of its potential returns per unit of risk. SigmaTron International is currently generating about -0.06 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 57,378 from holding NYSE Composite or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. SigmaTron International
Performance |
| Timeline |
NYSE Composite and SigmaTron International Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SigmaTron International
Pair trading matchups for SigmaTron International
Pair Trading with NYSE Composite and SigmaTron International
The main advantage of trading using opposite NYSE Composite and SigmaTron International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| SigmaTron International vs. Integrated Media Technology | SigmaTron International vs. Data IO | SigmaTron International vs. Research Frontiers Incorporated | SigmaTron International vs. Maris Tech |
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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