Correlation Between SIFCO Industries and National Presto
Can any of the company-specific risk be diversified away by investing in both SIFCO Industries and National Presto 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 SIFCO Industries and National Presto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIFCO Industries and National Presto Industries, you can compare the effects of market volatilities on SIFCO Industries and National Presto 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 SIFCO Industries with a short position of National Presto. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIFCO Industries and National Presto.
Diversification Opportunities for SIFCO Industries and National Presto
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SIFCO and National is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SIFCO Industries and National Presto Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Presto Indu and SIFCO Industries 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 SIFCO Industries are associated (or correlated) with National Presto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Presto Indu has no effect on the direction of SIFCO Industries i.e., SIFCO Industries and National Presto go up and down completely randomly.
Pair Corralation between SIFCO Industries and National Presto
Considering the 90-day investment horizon SIFCO Industries is expected to under-perform the National Presto. In addition to that, SIFCO Industries is 1.54 times more volatile than National Presto Industries. It trades about -0.06 of its total potential returns per unit of risk. National Presto Industries is currently generating about 0.08 per unit of volatility. If you would invest 7,436 in National Presto Industries on August 23, 2024 and sell it today you would earn a total of 216.00 from holding National Presto Industries or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIFCO Industries vs. National Presto Industries
Performance |
| Timeline |
| SIFCO Industries |
| National Presto Indu |
SIFCO Industries and National Presto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIFCO Industries and National Presto
The main advantage of trading using opposite SIFCO Industries and National Presto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIFCO Industries position performs unexpectedly, National Presto 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 National Presto will offset losses from the drop in National Presto's long position.| SIFCO Industries vs. Ducommun Incorporated | SIFCO Industries vs. Park Electrochemical | SIFCO Industries vs. National Presto Industries | SIFCO Industries vs. Astronics |
| National Presto vs. Planet Labs PBC | National Presto vs. Rocket Lab USA | National Presto vs. Redwire Corp | National Presto vs. Virgin Galactic Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |