Correlation Between Plexus Corp and Research Frontiers
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Research Frontiers 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 Research Frontiers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Research Frontiers Incorporated, you can compare the effects of market volatilities on Plexus Corp and Research Frontiers 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 Research Frontiers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Research Frontiers.
Diversification Opportunities for Plexus Corp and Research Frontiers
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Plexus and Research is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Research Frontiers Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Research Frontiers 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 Research Frontiers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Research Frontiers has no effect on the direction of Plexus Corp i.e., Plexus Corp and Research Frontiers go up and down completely randomly.
Pair Corralation between Plexus Corp and Research Frontiers
Given the investment horizon of 90 days Plexus Corp is expected to generate 0.84 times more return on investment than Research Frontiers. However, Plexus Corp is 1.2 times less risky than Research Frontiers. It trades about 0.19 of its potential returns per unit of risk. Research Frontiers Incorporated is currently generating about -0.13 per unit of risk. If you would invest 14,658 in Plexus Corp on August 31, 2024 and sell it today you would earn a total of 1,575 from holding Plexus Corp or generate 10.74% 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. Research Frontiers Incorporate
Performance |
| Timeline |
| Plexus Corp |
| Research Frontiers |
Plexus Corp and Research Frontiers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Research Frontiers
The main advantage of trading using opposite Plexus Corp and Research Frontiers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Research Frontiers 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 Research Frontiers will offset losses from the drop in Research Frontiers' long position.| Plexus Corp vs. Sanmina | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Celestica | Plexus Corp vs. CTS Corporation |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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