Correlation Between ChargePoint Holdings and Dycom Industries

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

By analyzing existing cross correlation between ChargePoint Holdings and Dycom Industries, you can compare the effects of market volatilities on ChargePoint Holdings and Dycom 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 ChargePoint Holdings with a short position of Dycom Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChargePoint Holdings and Dycom Industries.

Diversification Opportunities for ChargePoint Holdings and Dycom Industries

-0.07

Correlation Coefficient

ChargePoint Holdings  Dycom Industries

Good diversification

The 3 months correlation between ChargePoint and Dycom is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ChargePoint Holdings and Dycom Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dycom Industries and ChargePoint Holdings 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 ChargePoint Holdings are associated (or correlated) with Dycom Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dycom Industries has no effect on the direction of ChargePoint Holdings i.e., ChargePoint Holdings and Dycom Industries go up and down completely randomly.

Pair Corralation between ChargePoint Holdings and Dycom Industries

Given the investment horizon of 90 days ChargePoint Holdings is expected to under-perform the Dycom Industries. In addition to that, ChargePoint Holdings is 2.52 times more volatile than Dycom Industries. It trades about -0.03 of its total potential returns per unit of risk. Dycom Industries is currently generating about 0.27 per unit of volatility. If you would invest  18,296  in Dycom Industries on May 4, 2025 and sell it today you would earn a total of  8,033  from holding Dycom Industries or generate 43.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ChargePoint Holdings  vs.  Dycom Industries

ChargePoint Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Dycom Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dycom Industries are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Dycom Industries showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ChargePoint Holdings and Dycom Industries

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

The idea behind ChargePoint Holdings and Dycom Industries 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.