Correlation Between SigmaTron International and LightPath Technologies
Can any of the company-specific risk be diversified away by investing in both SigmaTron International and LightPath Technologies 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 LightPath Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SigmaTron International and LightPath Technologies, you can compare the effects of market volatilities on SigmaTron International and LightPath Technologies 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 LightPath Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SigmaTron International and LightPath Technologies.
Diversification Opportunities for SigmaTron International and LightPath Technologies
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SigmaTron and LightPath is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SigmaTron International and LightPath Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightPath Technologies 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 LightPath Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightPath Technologies has no effect on the direction of SigmaTron International i.e., SigmaTron International and LightPath Technologies go up and down completely randomly.
Pair Corralation between SigmaTron International and LightPath Technologies
Given the investment horizon of 90 days SigmaTron International is expected to generate 12.35 times less return on investment than LightPath Technologies. In addition to that, SigmaTron International is 1.45 times more volatile than LightPath Technologies. It trades about 0.0 of its total potential returns per unit of risk. LightPath Technologies is currently generating about 0.03 per unit of volatility. If you would invest 115.00 in LightPath Technologies on August 27, 2024 and sell it today you would earn a total of 34.00 from holding LightPath Technologies or generate 29.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SigmaTron International vs. LightPath Technologies
Performance |
| Timeline |
| SigmaTron International |
| LightPath Technologies |
SigmaTron International and LightPath Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SigmaTron International and LightPath Technologies
The main advantage of trading using opposite SigmaTron International and LightPath Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SigmaTron International position performs unexpectedly, LightPath Technologies 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 LightPath Technologies will offset losses from the drop in LightPath Technologies' long position.| SigmaTron International vs. Integrated Media Technology | SigmaTron International vs. Data IO | SigmaTron International vs. Research Frontiers Incorporated | SigmaTron International vs. Maris Tech |
| LightPath Technologies vs. Methode Electronics | LightPath Technologies vs. OSI Systems | LightPath Technologies vs. Plexus Corp | LightPath Technologies vs. CTS Corporation |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |