Correlation Between SigmaTron International and TTM Technologies
Can any of the company-specific risk be diversified away by investing in both SigmaTron International and TTM 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 TTM 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 TTM Technologies, you can compare the effects of market volatilities on SigmaTron International and TTM 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 TTM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SigmaTron International and TTM Technologies.
Diversification Opportunities for SigmaTron International and TTM Technologies
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between SigmaTron and TTM is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SigmaTron International and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM 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 TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of SigmaTron International i.e., SigmaTron International and TTM Technologies go up and down completely randomly.
Pair Corralation between SigmaTron International and TTM Technologies
Given the investment horizon of 90 days SigmaTron International is expected to under-perform the TTM Technologies. But the stock apears to be less risky and, when comparing its historical volatility, SigmaTron International is 1.31 times less risky than TTM Technologies. The stock trades about -0.02 of its potential returns per unit of risk. The TTM Technologies is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,857 in TTM Technologies on August 24, 2024 and sell it today you would earn a total of 507.00 from holding TTM Technologies or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SigmaTron International vs. TTM Technologies
Performance |
| Timeline |
| SigmaTron International |
| TTM Technologies |
SigmaTron International and TTM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SigmaTron International and TTM Technologies
The main advantage of trading using opposite SigmaTron International and TTM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SigmaTron International position performs unexpectedly, TTM 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 TTM Technologies will offset losses from the drop in TTM 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 |
| TTM Technologies vs. Sanmina | TTM Technologies vs. Benchmark Electronics | TTM Technologies vs. Methode Electronics | TTM Technologies vs. OSI Systems |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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