Correlation Between Data IO and ReposiTrak

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

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

Diversification Opportunities for Data IO and ReposiTrak

-0.81

Correlation Coefficient

Data IO  ReposiTrak

Pay attention - limited upside

The 3 months correlation between Data and ReposiTrak is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Data IO and ReposiTrak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReposiTrak 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 ReposiTrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReposiTrak has no effect on the direction of Data IO i.e., Data IO and ReposiTrak go up and down completely randomly.

Pair Corralation between Data IO and ReposiTrak

Given the investment horizon of 90 days Data IO is expected to generate 1.34 times more return on investment than ReposiTrak. However, Data IO is 1.34 times more volatile than ReposiTrak. It trades about 0.29 of its potential returns per unit of risk. ReposiTrak is currently generating about -0.18 per unit of risk. If you would invest  232.00  in Data IO on May 1, 2025 and sell it today you would earn a total of  111.00  from holding Data IO or generate 47.84% return on investment over 90 days.

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

Data IO  vs.  ReposiTrak

Data IO

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Data IO are ranked lower than 22 (%) 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.

ReposiTrak

Risk-Adjusted Performance

Very Weak

Over the last 90 days ReposiTrak has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Data IO and ReposiTrak

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

The idea behind Data IO and ReposiTrak 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.