Correlation Between SigmaTron International and Inrad Optics

Can any of the company-specific risk be diversified away by investing in both SigmaTron International and Inrad Optics 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 Inrad Optics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SigmaTron International and Inrad Optics, you can compare the effects of market volatilities on SigmaTron International and Inrad Optics 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 Inrad Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SigmaTron International and Inrad Optics.

Diversification Opportunities for SigmaTron International and Inrad Optics

0.0

Correlation Coefficient

SigmaTron International  Inrad Optics

Pay attention - limited upside

The 3 months correlation between SigmaTron and Inrad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SigmaTron International and Inrad Optics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inrad Optics 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 Inrad Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inrad Optics has no effect on the direction of SigmaTron International i.e., SigmaTron International and Inrad Optics go up and down completely randomly.

Pair Corralation between SigmaTron International and Inrad Optics

If you would invest (100.00) in Inrad Optics on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Inrad Optics or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SigmaTron International  vs.  Inrad Optics

SigmaTron International

Risk-Adjusted Performance

Very Weak

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

Inrad Optics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inrad Optics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Inrad Optics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SigmaTron International and Inrad Optics

The main advantage of trading using opposite SigmaTron International and Inrad Optics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SigmaTron International position performs unexpectedly, Inrad Optics 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 Inrad Optics will offset losses from the drop in Inrad Optics' long position.

The idea behind SigmaTron International and Inrad Optics 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.