Correlation Between SigmaTron International and Orbit International

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

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

Diversification Opportunities for SigmaTron International and Orbit International

-0.61

Correlation Coefficient

SigmaTron International  Orbit International

Excellent diversification

The 3 months correlation between SigmaTron and Orbit is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding SigmaTron International and Orbit International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit International 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 Orbit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit International has no effect on the direction of SigmaTron International i.e., SigmaTron International and Orbit International go up and down completely randomly.

Pair Corralation between SigmaTron International and Orbit International

If you would invest  670.00  in Orbit International on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Orbit International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	2.33%
Values	Daily Returns

SigmaTron International  vs.  Orbit International

SigmaTron International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SigmaTron International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Orbit International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orbit International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Orbit International is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SigmaTron International and Orbit International

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

The idea behind SigmaTron International and Orbit International 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.