Correlation Between Allient and Plexus Corp
Can any of the company-specific risk be diversified away by investing in both Allient and Plexus Corp 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 Allient and Plexus Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and Plexus Corp, you can compare the effects of market volatilities on Allient and Plexus Corp 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 Allient with a short position of Plexus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and Plexus Corp.
Diversification Opportunities for Allient and Plexus Corp
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allient and Plexus is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Plexus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plexus Corp and Allient 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 Allient are associated (or correlated) with Plexus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plexus Corp has no effect on the direction of Allient i.e., Allient and Plexus Corp go up and down completely randomly.
Pair Corralation between Allient and Plexus Corp
Given the investment horizon of 90 days Allient is expected to generate 1.03 times more return on investment than Plexus Corp. However, Allient is 1.03 times more volatile than Plexus Corp. It trades about 0.66 of its potential returns per unit of risk. Plexus Corp is currently generating about 0.21 per unit of risk. If you would invest 1,756 in Allient on August 30, 2024 and sell it today you would earn a total of 809.00 from holding Allient or generate 46.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. Plexus Corp
Performance |
| Timeline |
| Allient |
| Plexus Corp |
Allient and Plexus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and Plexus Corp
The main advantage of trading using opposite Allient and Plexus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, Plexus Corp 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 Plexus Corp will offset losses from the drop in Plexus Corp's long position.| Allient vs. Vicor | Allient vs. LSI Industries | Allient vs. Shenzhen Genvict Technologies | Allient vs. Topsec Technologies Group |
| Plexus Corp vs. Celestica | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Flex | Plexus Corp vs. Jabil Circuit |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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