Correlation Between Allied Motion and Plexus Corp
Can any of the company-specific risk be diversified away by investing in both Allied Motion 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 Allied Motion and Plexus Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Motion Technologies and Plexus Corp, you can compare the effects of market volatilities on Allied Motion 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 Allied Motion with a short position of Plexus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Motion and Plexus Corp.
Diversification Opportunities for Allied Motion and Plexus Corp
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allied and Plexus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Allied Motion Technologies and Plexus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plexus Corp and Allied Motion 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 Allied Motion Technologies 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 Allied Motion i.e., Allied Motion and Plexus Corp go up and down completely randomly.
Pair Corralation between Allied Motion and Plexus Corp
If you would invest 10,281 in Plexus Corp on August 24, 2024 and sell it today you would earn a total of 5,920 from holding Plexus Corp or generate 57.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Allied Motion Technologies vs. Plexus Corp
Performance |
| Timeline |
| Allied Motion Techno |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Plexus Corp |
Allied Motion and Plexus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Motion and Plexus Corp
The main advantage of trading using opposite Allied Motion and Plexus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Motion 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.| Allied Motion vs. Plexus Corp | Allied Motion vs. Sanmina | Allied Motion vs. Bel Fuse A | Allied Motion vs. Methode Electronics |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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