Correlation Between Plexus Corp and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Sunny Optical 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 Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Sunny Optical Technology, you can compare the effects of market volatilities on Plexus Corp and Sunny Optical 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 Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Sunny Optical.
Diversification Opportunities for Plexus Corp and Sunny Optical
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Plexus and Sunny is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology 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 Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of Plexus Corp i.e., Plexus Corp and Sunny Optical go up and down completely randomly.
Pair Corralation between Plexus Corp and Sunny Optical
Given the investment horizon of 90 days Plexus Corp is expected to generate 1.82 times less return on investment than Sunny Optical. But when comparing it to its historical volatility, Plexus Corp is 1.57 times less risky than Sunny Optical. It trades about 0.19 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 6,486 in Sunny Optical Technology on August 31, 2024 and sell it today you would earn a total of 1,287 from holding Sunny Optical Technology or generate 19.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. Sunny Optical Technology
Performance |
| Timeline |
| Plexus Corp |
| Sunny Optical Technology |
Plexus Corp and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Sunny Optical
The main advantage of trading using opposite Plexus Corp and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical's long position.| Plexus Corp vs. Sanmina | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Methode Electronics | Plexus Corp vs. Celestica |
| Sunny Optical vs. Fabrinet | Sunny Optical vs. Flex | Sunny Optical vs. Sanmina | Sunny Optical vs. Plexus Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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