Correlation Between CSP and SigmaTron International

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

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

Diversification Opportunities for CSP and SigmaTron International

-0.78

Correlation Coefficient

CSP  SigmaTron International

Pay attention - limited upside

The 3 months correlation between CSP and SigmaTron is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CSP Inc and SigmaTron International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SigmaTron International and CSP 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 CSP Inc are associated (or correlated) with SigmaTron International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SigmaTron International has no effect on the direction of CSP i.e., CSP and SigmaTron International go up and down completely randomly.

Pair Corralation between CSP and SigmaTron International

Given the investment horizon of 90 days CSP Inc is expected to under-perform the SigmaTron International. In addition to that, CSP is 10.32 times more volatile than SigmaTron International. It trades about -0.27 of its total potential returns per unit of risk. SigmaTron International is currently generating about 0.19 per unit of volatility. If you would invest  298.00  in SigmaTron International on April 29, 2025 and sell it today you would earn a total of  3.00  from holding SigmaTron International or generate 1.01% return on investment over 90 days.

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

CSP Inc  vs.  SigmaTron International

CSP Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSP Inc 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 basic indicators remain fairly strong which may send shares a bit higher in August 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

SigmaTron International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SigmaTron International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, SigmaTron International sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSP and SigmaTron International

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

The idea behind CSP Inc and SigmaTron 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.