Correlation Between Ouster and SigmaTron International
Can any of the company-specific risk be diversified away by investing in both Ouster 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 Ouster and SigmaTron International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ouster Inc and SigmaTron International, you can compare the effects of market volatilities on Ouster 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 Ouster with a short position of SigmaTron International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ouster and SigmaTron International.
Diversification Opportunities for Ouster and SigmaTron International
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ouster and SigmaTron is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ouster Inc and SigmaTron International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SigmaTron International and Ouster 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 Ouster Inc 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 Ouster i.e., Ouster and SigmaTron International go up and down completely randomly.
Pair Corralation between Ouster and SigmaTron International
Given the investment horizon of 90 days Ouster Inc is expected to generate 2.68 times more return on investment than SigmaTron International. However, Ouster is 2.68 times more volatile than SigmaTron International. It trades about 0.18 of its potential returns per unit of risk. SigmaTron International is currently generating about -0.06 per unit of risk. If you would invest 743.00 in Ouster Inc on August 27, 2024 and sell it today you would earn a total of 210.00 from holding Ouster Inc or generate 28.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ouster Inc vs. SigmaTron International
Performance |
| Timeline |
| Ouster Inc |
| SigmaTron International |
Ouster and SigmaTron International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ouster and SigmaTron International
The main advantage of trading using opposite Ouster and SigmaTron International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ouster 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.| Ouster vs. KULR Technology Group | Ouster vs. LightPath Technologies | Ouster vs. Daktronics | Ouster vs. Kopin |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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