Correlation Between SigmaTron International and M Tron
Can any of the company-specific risk be diversified away by investing in both SigmaTron International and M Tron 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 M Tron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SigmaTron International and M tron Industries, you can compare the effects of market volatilities on SigmaTron International and M Tron 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 M Tron. Check out your portfolio center. Please also check ongoing floating volatility patterns of SigmaTron International and M Tron.
Diversification Opportunities for SigmaTron International and M Tron
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SigmaTron and MPTI is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding SigmaTron International and M tron Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M tron Industries 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 M Tron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M tron Industries has no effect on the direction of SigmaTron International i.e., SigmaTron International and M Tron go up and down completely randomly.
Pair Corralation between SigmaTron International and M Tron
Given the investment horizon of 90 days SigmaTron International is expected to under-perform the M Tron. In addition to that, SigmaTron International is 1.05 times more volatile than M tron Industries. It trades about -0.13 of its total potential returns per unit of risk. M tron Industries is currently generating about 0.11 per unit of volatility. If you would invest 4,315 in M tron Industries on October 31, 2024 and sell it today you would earn a total of 1,438 from holding M tron Industries or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SigmaTron International vs. M tron Industries
Performance |
| Timeline |
| SigmaTron International |
| M tron Industries |
SigmaTron International and M Tron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SigmaTron International and M Tron
The main advantage of trading using opposite SigmaTron International and M Tron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SigmaTron International position performs unexpectedly, M Tron 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 M Tron will offset losses from the drop in M Tron'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 |
| M Tron vs. Ieh Corp | M Tron vs. Deswell Industries | M Tron vs. Methode Electronics | M Tron vs. Richardson 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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