Correlation Between Plexus Corp and Flex
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Flex 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 Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Flex, you can compare the effects of market volatilities on Plexus Corp and Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Flex.
Diversification Opportunities for Plexus Corp and Flex
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Plexus and Flex is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Plexus Corp i.e., Plexus Corp and Flex go up and down completely randomly.
Pair Corralation between Plexus Corp and Flex
Given the investment horizon of 90 days Plexus Corp is expected to generate 0.9 times more return on investment than Flex. However, Plexus Corp is 1.12 times less risky than Flex. It trades about 0.13 of its potential returns per unit of risk. Flex is currently generating about 0.07 per unit of risk. If you would invest 11,266 in Plexus Corp on August 24, 2024 and sell it today you would earn a total of 4,697 from holding Plexus Corp or generate 41.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. Flex
Performance |
| Timeline |
| Plexus Corp |
| Flex |
Plexus Corp and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Flex
The main advantage of trading using opposite Plexus Corp and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| Plexus Corp vs. Celestica | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Flex | Plexus Corp vs. Jabil Circuit |
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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