Correlation Between Dycom Industries and 374Water Common

Can any of the company-specific risk be diversified away by investing in both Dycom Industries and 374Water Common 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 Dycom Industries and 374Water Common into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dycom Industries and 374Water Common Stock, you can compare the effects of market volatilities on Dycom Industries and 374Water Common 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 Dycom Industries with a short position of 374Water Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dycom Industries and 374Water Common.

Diversification Opportunities for Dycom Industries and 374Water Common

-0.47

Correlation Coefficient

Dycom Industries  374Water Common

Very good diversification

The 3 months correlation between Dycom and 374Water is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dycom Industries and 374Water Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 374Water Common Stock and Dycom Industries 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 Dycom Industries are associated (or correlated) with 374Water Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 374Water Common Stock has no effect on the direction of Dycom Industries i.e., Dycom Industries and 374Water Common go up and down completely randomly.

Pair Corralation between Dycom Industries and 374Water Common

Allowing for the 90-day total investment horizon Dycom Industries is expected to generate 0.21 times more return on investment than 374Water Common. However, Dycom Industries is 4.67 times less risky than 374Water Common. It trades about 0.25 of its potential returns per unit of risk. 374Water Common Stock is currently generating about 0.02 per unit of risk. If you would invest  19,212  in Dycom Industries on May 18, 2025 and sell it today you would earn a total of  7,724  from holding Dycom Industries or generate 40.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Dycom Industries  vs.  374Water Common Stock

Dycom Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dycom Industries are ranked lower than 19 (%) 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.

374Water Common Stock

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 374Water Common Stock are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, 374Water Common may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dycom Industries and 374Water Common

The main advantage of trading using opposite Dycom Industries and 374Water Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dycom Industries position performs unexpectedly, 374Water Common 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 374Water Common will offset losses from the drop in 374Water Common's long position.

The idea behind Dycom Industries and 374Water Common Stock 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..