Correlation Between K Bro and SigmaTron International

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

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

Diversification Opportunities for K Bro and SigmaTron International

0.45

Correlation Coefficient

K Bro  SigmaTron International

Very weak diversification

The 3 months correlation between KBRLF and SigmaTron is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding K Bro Linen and SigmaTron International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SigmaTron International and K Bro 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 K Bro Linen 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 K Bro i.e., K Bro and SigmaTron International go up and down completely randomly.

Pair Corralation between K Bro and SigmaTron International

Assuming the 90 days horizon K Bro Linen is expected to under-perform the SigmaTron International. But the pink sheet apears to be less risky and, when comparing its historical volatility, K Bro Linen is 23.87 times less risky than SigmaTron International. The pink sheet trades about -0.02 of its potential returns per unit of risk. The SigmaTron International is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  119.00  in SigmaTron International on April 28, 2025 and sell it today you would earn a total of  182.00  from holding SigmaTron International or generate 152.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	58.73%
Values	Daily Returns

K Bro Linen  vs.  SigmaTron International

K Bro Linen

Risk-Adjusted Performance

Very Weak

Over the last 90 days K Bro Linen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, K Bro is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SigmaTron International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SigmaTron International are ranked lower than 10 (%) 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 K Bro and SigmaTron International

The main advantage of trading using opposite K Bro and SigmaTron International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K Bro 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 K Bro Linen 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.