Correlation Between Triumph and SIFCO Industries
Can any of the company-specific risk be diversified away by investing in both Triumph and SIFCO Industries 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 Triumph and SIFCO Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triumph Group and SIFCO Industries, you can compare the effects of market volatilities on Triumph and SIFCO Industries 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 Triumph with a short position of SIFCO Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triumph and SIFCO Industries.
Diversification Opportunities for Triumph and SIFCO Industries
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Triumph and SIFCO is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Group and SIFCO Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIFCO Industries and Triumph 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 Triumph Group are associated (or correlated) with SIFCO Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIFCO Industries has no effect on the direction of Triumph i.e., Triumph and SIFCO Industries go up and down completely randomly.
Pair Corralation between Triumph and SIFCO Industries
Considering the 90-day investment horizon Triumph Group is expected to generate 1.08 times more return on investment than SIFCO Industries. However, Triumph is 1.08 times more volatile than SIFCO Industries. It trades about 0.07 of its potential returns per unit of risk. SIFCO Industries is currently generating about 0.04 per unit of risk. If you would invest 1,119 in Triumph Group on August 26, 2024 and sell it today you would earn a total of 808.00 from holding Triumph Group or generate 72.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Triumph Group vs. SIFCO Industries
Performance |
| Timeline |
| Triumph Group |
| SIFCO Industries |
Triumph and SIFCO Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triumph and SIFCO Industries
The main advantage of trading using opposite Triumph and SIFCO Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triumph position performs unexpectedly, SIFCO Industries 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 SIFCO Industries will offset losses from the drop in SIFCO Industries' long position.| Triumph vs. Mercury Systems | Triumph vs. Curtiss Wright | Triumph vs. Hexcel | Triumph vs. Ducommun Incorporated |
| SIFCO Industries vs. Ducommun Incorporated | SIFCO Industries vs. Park Electrochemical | SIFCO Industries vs. National Presto Industries | SIFCO Industries vs. Astronics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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