Correlation Between SigmaTron International and Hillcrest Energy
Can any of the company-specific risk be diversified away by investing in both SigmaTron International and Hillcrest Energy 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 Hillcrest Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SigmaTron International and Hillcrest Energy Technologies, you can compare the effects of market volatilities on SigmaTron International and Hillcrest Energy 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 Hillcrest Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SigmaTron International and Hillcrest Energy.
Diversification Opportunities for SigmaTron International and Hillcrest Energy
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SigmaTron and Hillcrest is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SigmaTron International and Hillcrest Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillcrest Energy Tec 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 Hillcrest Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillcrest Energy Tec has no effect on the direction of SigmaTron International i.e., SigmaTron International and Hillcrest Energy go up and down completely randomly.
Pair Corralation between SigmaTron International and Hillcrest Energy
Given the investment horizon of 90 days SigmaTron International is expected to under-perform the Hillcrest Energy. But the stock apears to be less risky and, when comparing its historical volatility, SigmaTron International is 1.58 times less risky than Hillcrest Energy. The stock trades about -0.1 of its potential returns per unit of risk. The Hillcrest Energy Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8.68 in Hillcrest Energy Technologies on November 3, 2024 and sell it today you would earn a total of 0.19 from holding Hillcrest Energy Technologies or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SigmaTron International vs. Hillcrest Energy Technologies
Performance |
| Timeline |
| SigmaTron International |
| Hillcrest Energy Tec |
SigmaTron International and Hillcrest Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SigmaTron International and Hillcrest Energy
The main advantage of trading using opposite SigmaTron International and Hillcrest Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SigmaTron International position performs unexpectedly, Hillcrest Energy 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 Hillcrest Energy will offset losses from the drop in Hillcrest Energy's long position.| SigmaTron International vs. Integrated Media Technology | SigmaTron International vs. Data IO | SigmaTron International vs. Research Frontiers Incorporated | SigmaTron International vs. Maris Tech |
| Hillcrest Energy vs. Deswell Industries | Hillcrest Energy vs. Ostin Technology Group | Hillcrest Energy vs. Interlink Electronics | Hillcrest Energy vs. SigmaTron International |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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