Correlation Between SigmaTron International and Daktronics
Can any of the company-specific risk be diversified away by investing in both SigmaTron International and Daktronics 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 SigmaTron International and Daktronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SigmaTron International and Daktronics, you can compare the effects of market volatilities on SigmaTron International and Daktronics 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 SigmaTron International with a short position of Daktronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SigmaTron International and Daktronics.
Diversification Opportunities for SigmaTron International and Daktronics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SigmaTron and Daktronics is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SigmaTron International and Daktronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daktronics and SigmaTron International 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 SigmaTron International are associated (or correlated) with Daktronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daktronics has no effect on the direction of SigmaTron International i.e., SigmaTron International and Daktronics go up and down completely randomly.
Pair Corralation between SigmaTron International and Daktronics
Given the investment horizon of 90 days SigmaTron International is expected to under-perform the Daktronics. In addition to that, SigmaTron International is 1.18 times more volatile than Daktronics. It trades about -0.02 of its total potential returns per unit of risk. Daktronics is currently generating about 0.21 per unit of volatility. If you would invest 1,289 in Daktronics on August 24, 2024 and sell it today you would earn a total of 145.00 from holding Daktronics or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SigmaTron International vs. Daktronics
Performance |
| Timeline |
| SigmaTron International |
| Daktronics |
SigmaTron International and Daktronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SigmaTron International and Daktronics
The main advantage of trading using opposite SigmaTron International and Daktronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SigmaTron International position performs unexpectedly, Daktronics 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 Daktronics will offset losses from the drop in Daktronics' long position.| SigmaTron International vs. Integrated Media Technology | SigmaTron International vs. Data IO | SigmaTron International vs. Research Frontiers Incorporated | SigmaTron International vs. Maris Tech |
| Daktronics vs. Plexus Corp | Daktronics vs. OSI Systems | Daktronics vs. CTS Corporation | Daktronics vs. Benchmark Electronics |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |