Correlation Between Chuangs China and Sanmina
Can any of the company-specific risk be diversified away by investing in both Chuangs China 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 Chuangs China and Sanmina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and Sanmina, you can compare the effects of market volatilities on Chuangs China 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 Chuangs China with a short position of Sanmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Sanmina.
Diversification Opportunities for Chuangs China and Sanmina
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and Sanmina is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and Chuangs China 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 Chuangs China Investments 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 Chuangs China i.e., Chuangs China and Sanmina go up and down completely randomly.
Pair Corralation between Chuangs China and Sanmina
Assuming the 90 days horizon Chuangs China Investments is expected to under-perform the Sanmina. In addition to that, Chuangs China is 2.21 times more volatile than Sanmina. It trades about 0.0 of its total potential returns per unit of risk. Sanmina is currently generating about 0.08 per unit of volatility. If you would invest 4,560 in Sanmina on September 14, 2024 and sell it today you would earn a total of 3,158 from holding Sanmina or generate 69.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Chuangs China Investments vs. Sanmina
Performance |
| Timeline |
| Chuangs China Investments |
| Sanmina |
Chuangs China and Sanmina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Sanmina
The main advantage of trading using opposite Chuangs China and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China 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.| Chuangs China vs. Superior Plus Corp | Chuangs China vs. SIVERS SEMICONDUCTORS AB | Chuangs China vs. Reliance Steel Aluminum | Chuangs China vs. CHINA HUARONG ENERHD 50 |
| Sanmina vs. Datang International Power | Sanmina vs. Japan Asia Investment | Sanmina vs. Chuangs China Investments | Sanmina vs. HK Electric Investments |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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