Correlation Between Plexus Corp and Amphenol
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Amphenol 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 Plexus Corp and Amphenol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Amphenol, you can compare the effects of market volatilities on Plexus Corp and Amphenol 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 Plexus Corp with a short position of Amphenol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Amphenol.
Diversification Opportunities for Plexus Corp and Amphenol
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Plexus and Amphenol is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Amphenol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphenol and Plexus Corp 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 Plexus Corp are associated (or correlated) with Amphenol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphenol has no effect on the direction of Plexus Corp i.e., Plexus Corp and Amphenol go up and down completely randomly.
Pair Corralation between Plexus Corp and Amphenol
Given the investment horizon of 90 days Plexus Corp is expected to under-perform the Amphenol. But the stock apears to be less risky and, when comparing its historical volatility, Plexus Corp is 1.32 times less risky than Amphenol. The stock trades about -0.14 of its potential returns per unit of risk. The Amphenol is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,901 in Amphenol on November 3, 2024 and sell it today you would earn a total of 177.00 from holding Amphenol or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. Amphenol
Performance |
| Timeline |
| Plexus Corp |
| Amphenol |
Plexus Corp and Amphenol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Amphenol
The main advantage of trading using opposite Plexus Corp and Amphenol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Amphenol 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 Amphenol will offset losses from the drop in Amphenol's long position.| Plexus Corp vs. Methode Electronics | Plexus Corp vs. OSI Systems | Plexus Corp vs. Bel Fuse A | Plexus Corp vs. Richardson Electronics |
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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