Correlation Between SigmaTron International and EMagin

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Can any of the company-specific risk be diversified away by investing in both SigmaTron International and EMagin 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 EMagin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SigmaTron International and EMagin, you can compare the effects of market volatilities on SigmaTron International and EMagin 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 EMagin. Check out your portfolio center. Please also check ongoing floating volatility patterns of SigmaTron International and EMagin.

Diversification Opportunities for SigmaTron International and EMagin

SigmaTronEMaginDiversified AwaySigmaTronEMaginDiversified Away100%
-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between SigmaTron and EMagin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SigmaTron International and EMagin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMagin 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 EMagin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMagin has no effect on the direction of SigmaTron International i.e., SigmaTron International and EMagin go up and down completely randomly.

Pair Corralation between SigmaTron International and EMagin

If you would invest  200.00  in EMagin on September 17, 2024 and sell it today you would earn a total of  0.00  from holding EMagin or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy1.56%
ValuesDaily Returns

SigmaTron International  vs.  EMagin

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -20-1001020
JavaScript chart by amCharts 3.21.15SGMA EMAN
       Timeline  
SigmaTron International 

Risk-Adjusted Performance

0 of 100

 
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Over the last 90 days SigmaTron International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2.22.42.62.833.2
EMagin 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days EMagin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, EMagin is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

SigmaTron International and EMagin Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.53-4.15-2.76-1.37-0.02321.282.63.925.246.56 0.0280.0300.0320.034
JavaScript chart by amCharts 3.21.15SGMA EMAN
       Returns  

Pair Trading with SigmaTron International and EMagin

The main advantage of trading using opposite SigmaTron International and EMagin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SigmaTron International position performs unexpectedly, EMagin 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 EMagin will offset losses from the drop in EMagin's long position.
The idea behind SigmaTron International and EMagin pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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