Correlation Between Bel Fuse and Sanmina
Can any of the company-specific risk be diversified away by investing in both Bel Fuse and Sanmina 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 Bel Fuse and Sanmina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bel Fuse A and Sanmina, you can compare the effects of market volatilities on Bel Fuse and Sanmina 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 Bel Fuse with a short position of Sanmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bel Fuse and Sanmina.
Diversification Opportunities for Bel Fuse and Sanmina
Average diversification
The 3 months correlation between Bel and Sanmina is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bel Fuse A and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and Bel Fuse 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 Bel Fuse A are associated (or correlated) with Sanmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanmina has no effect on the direction of Bel Fuse i.e., Bel Fuse and Sanmina go up and down completely randomly.
Pair Corralation between Bel Fuse and Sanmina
Assuming the 90 days horizon Bel Fuse A is expected to under-perform the Sanmina. But the stock apears to be less risky and, when comparing its historical volatility, Bel Fuse A is 1.52 times less risky than Sanmina. The stock trades about -0.13 of its potential returns per unit of risk. The Sanmina is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 6,851 in Sanmina on August 28, 2024 and sell it today you would earn a total of 1,033 from holding Sanmina or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bel Fuse A vs. Sanmina
Performance |
| Timeline |
| Bel Fuse A |
| Sanmina |
Bel Fuse and Sanmina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bel Fuse and Sanmina
The main advantage of trading using opposite Bel Fuse and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bel Fuse position performs unexpectedly, Sanmina 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 Sanmina will offset losses from the drop in Sanmina's long position.| Bel Fuse vs. Richardson Electronics | Bel Fuse vs. LSI Industries | Bel Fuse vs. Benchmark Electronics | Bel Fuse vs. Plexus Corp |
| Sanmina vs. Benchmark Electronics | Sanmina vs. Methode Electronics | Sanmina vs. OSI Systems | Sanmina vs. Celestica |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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