Correlation Between Data IO and NLIGHT
Can any of the company-specific risk be diversified away by investing in both Data IO and NLIGHT 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 NLIGHT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data IO and nLIGHT Inc, you can compare the effects of market volatilities on Data IO and NLIGHT 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 NLIGHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data IO and NLIGHT.
Diversification Opportunities for Data IO and NLIGHT
Very weak diversification
The 3 months correlation between Data and NLIGHT is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Data IO and nLIGHT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nLIGHT Inc 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 NLIGHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nLIGHT Inc has no effect on the direction of Data IO i.e., Data IO and NLIGHT go up and down completely randomly.
Pair Corralation between Data IO and NLIGHT
Given the investment horizon of 90 days Data IO is expected to under-perform the NLIGHT. But the stock apears to be less risky and, when comparing its historical volatility, Data IO is 2.05 times less risky than NLIGHT. The stock trades about -0.01 of its potential returns per unit of risk. The nLIGHT Inc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,011 in nLIGHT Inc on June 2, 2025 and sell it today you would earn a total of 869.00 from holding nLIGHT Inc or generate 43.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Data IO vs. nLIGHT Inc
Performance |
| Timeline |
| Data IO |
| nLIGHT Inc |
Data IO and NLIGHT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Data IO and NLIGHT
The main advantage of trading using opposite Data IO and NLIGHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data IO position performs unexpectedly, NLIGHT 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 NLIGHT will offset losses from the drop in NLIGHT's long position.| Data IO vs. CSP Inc | Data IO vs. Deswell Industries | Data IO vs. Electro Sensors | Data IO vs. Frequency Electronics |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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