Correlation Between Hubbell Incorporated and Sanmina
Can any of the company-specific risk be diversified away by investing in both Hubbell Incorporated 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 Hubbell Incorporated and Sanmina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hubbell Incorporated and Sanmina, you can compare the effects of market volatilities on Hubbell Incorporated 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 Hubbell Incorporated with a short position of Sanmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubbell Incorporated and Sanmina.
Diversification Opportunities for Hubbell Incorporated and Sanmina
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubbell and Sanmina is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hubbell Incorporated and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and Hubbell Incorporated 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 Hubbell Incorporated 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 Hubbell Incorporated i.e., Hubbell Incorporated and Sanmina go up and down completely randomly.
Pair Corralation between Hubbell Incorporated and Sanmina
Assuming the 90 days trading horizon Hubbell Incorporated is expected to generate 1.16 times less return on investment than Sanmina. But when comparing it to its historical volatility, Hubbell Incorporated is 1.44 times less risky than Sanmina. It trades about 0.1 of its potential returns per unit of risk. Sanmina is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Significant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Hubbell Incorporated vs. Sanmina
Performance |
| Timeline |
| Hubbell Incorporated |
| Sanmina |
Hubbell Incorporated and Sanmina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubbell Incorporated and Sanmina
The main advantage of trading using opposite Hubbell Incorporated and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubbell Incorporated 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.| Hubbell Incorporated vs. UPDATE SOFTWARE | Hubbell Incorporated vs. Dairy Farm International | Hubbell Incorporated vs. Daito Trust Construction | Hubbell Incorporated vs. Check Point Software |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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