Correlation Between GEAR4MUSIC and Sanmina
Can any of the company-specific risk be diversified away by investing in both GEAR4MUSIC 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 GEAR4MUSIC and Sanmina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEAR4MUSIC LS 10 and Sanmina, you can compare the effects of market volatilities on GEAR4MUSIC 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 GEAR4MUSIC with a short position of Sanmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEAR4MUSIC and Sanmina.
Diversification Opportunities for GEAR4MUSIC and Sanmina
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEAR4MUSIC and Sanmina is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding GEAR4MUSIC LS 10 and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and GEAR4MUSIC 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 GEAR4MUSIC LS 10 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 GEAR4MUSIC i.e., GEAR4MUSIC and Sanmina go up and down completely randomly.
Pair Corralation between GEAR4MUSIC and Sanmina
Assuming the 90 days horizon GEAR4MUSIC LS 10 is expected to under-perform the Sanmina. In addition to that, GEAR4MUSIC is 2.15 times more volatile than Sanmina. It trades about -0.54 of its total potential returns per unit of risk. Sanmina is currently generating about 0.45 per unit of volatility. If you would invest 7,324 in Sanmina on October 25, 2024 and sell it today you would earn a total of 668.00 from holding Sanmina or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEAR4MUSIC LS 10 vs. Sanmina
Performance |
| Timeline |
| GEAR4MUSIC LS 10 |
| Sanmina |
GEAR4MUSIC and Sanmina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEAR4MUSIC and Sanmina
The main advantage of trading using opposite GEAR4MUSIC and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEAR4MUSIC 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.| GEAR4MUSIC vs. Amazon Inc | GEAR4MUSIC vs. Amazon Inc | GEAR4MUSIC vs. Alibaba Group Holdings | GEAR4MUSIC vs. MEITUAN UNSPADR2B |
| Sanmina vs. RETAIL FOOD GROUP | Sanmina vs. Retail Estates NV | Sanmina vs. BURLINGTON STORES | Sanmina vs. CAREER EDUCATION |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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