Correlation Between Plexus Corp and EPlus
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and EPlus 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 EPlus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and ePlus inc, you can compare the effects of market volatilities on Plexus Corp and EPlus 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 EPlus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and EPlus.
Diversification Opportunities for Plexus Corp and EPlus
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plexus and EPlus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and ePlus inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ePlus inc 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 EPlus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ePlus inc has no effect on the direction of Plexus Corp i.e., Plexus Corp and EPlus go up and down completely randomly.
Pair Corralation between Plexus Corp and EPlus
Given the investment horizon of 90 days Plexus Corp is expected to generate 0.58 times more return on investment than EPlus. However, Plexus Corp is 1.73 times less risky than EPlus. It trades about 0.24 of its potential returns per unit of risk. ePlus inc is currently generating about -0.15 per unit of risk. If you would invest 14,332 in Plexus Corp on August 27, 2024 and sell it today you would earn a total of 1,869 from holding Plexus Corp or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. ePlus inc
Performance |
| Timeline |
| Plexus Corp |
| ePlus inc |
Plexus Corp and EPlus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and EPlus
The main advantage of trading using opposite Plexus Corp and EPlus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, EPlus 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 EPlus will offset losses from the drop in EPlus' 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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