Correlation Between Dycom Industries and Tutor Perini

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

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

Diversification Opportunities for Dycom Industries and Tutor Perini

0.04

Correlation Coefficient

Dycom Industries  Tutor Perini

Significant diversification

The 3 months correlation between Dycom and Tutor is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dycom Industries and Tutor Perini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tutor Perini 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 Tutor Perini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tutor Perini has no effect on the direction of Dycom Industries i.e., Dycom Industries and Tutor Perini go up and down completely randomly.

Pair Corralation between Dycom Industries and Tutor Perini

Allowing for the 90-day total investment horizon Dycom Industries is expected to generate 0.81 times more return on investment than Tutor Perini. However, Dycom Industries is 1.24 times less risky than Tutor Perini. It trades about 0.25 of its potential returns per unit of risk. Tutor Perini is currently generating about 0.0 per unit of risk. If you would invest  13,675  in Dycom Industries on February 6, 2025 and sell it today you would earn a total of  4,658  from holding Dycom Industries or generate 34.06% return on investment over 90 days.

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

Dycom Industries  vs.  Tutor Perini

Dycom Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dycom Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Dycom Industries is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Tutor Perini

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tutor Perini are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Tutor Perini is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Dycom Industries and Tutor Perini

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

The idea behind Dycom Industries and Tutor Perini 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.