Correlation Between Data IO and SigmaTron International

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

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

Diversification Opportunities for Data IO and SigmaTron International

0.83

Correlation Coefficient

Data IO  SigmaTron International

Very poor diversification

The 3 months correlation between Data and SigmaTron is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Data IO and SigmaTron International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SigmaTron International and Data IO 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 Data IO 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 Data IO i.e., Data IO and SigmaTron International go up and down completely randomly.

Pair Corralation between Data IO and SigmaTron International

Given the investment horizon of 90 days Data IO is expected to generate 4.97 times less return on investment than SigmaTron International. But when comparing it to its historical volatility, Data IO is 7.59 times less risky than SigmaTron International. It trades about 0.17 of its potential returns per unit of risk. SigmaTron International is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  168.00  in SigmaTron International on May 12, 2025 and sell it today you would earn a total of  133.00  from holding SigmaTron International or generate 79.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	84.13%
Values	Daily Returns

Data IO  vs.  SigmaTron International

Data IO

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Data IO are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent forward indicators, Data IO displayed solid returns over the last few months and may actually be approaching a breakup point.

SigmaTron International

Risk-Adjusted Performance

Fair

Over the last 90 days SigmaTron International has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Data IO and SigmaTron International

The main advantage of trading using opposite Data IO and SigmaTron International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data IO 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 Data IO 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.