Correlation Between Dycom Industries and AAON

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

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

Diversification Opportunities for Dycom Industries and AAON

0.81

Correlation Coefficient

Dycom Industries  AAON

Very poor diversification

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

Pair Corralation between Dycom Industries and AAON

Allowing for the 90-day total investment horizon Dycom Industries is expected to generate 0.69 times more return on investment than AAON. However, Dycom Industries is 1.44 times less risky than AAON. It trades about 0.17 of its potential returns per unit of risk. AAON Inc is currently generating about 0.03 per unit of risk. If you would invest  25,742  in Dycom Industries on August 22, 2025 and sell it today you would earn a total of  6,595  from holding Dycom Industries or generate 25.62% return on investment over 90 days.

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

Dycom Industries  vs.  AAON Inc

Dycom Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dycom Industries are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Dycom Industries showed solid returns over the last few months and may actually be approaching a breakup point.

AAON Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AAON Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, AAON may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Dycom Industries and AAON

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

The idea behind Dycom Industries and AAON Inc 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.