Correlation Between Plexus Corp and Supercom
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Supercom 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 Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Supercom, you can compare the effects of market volatilities on Plexus Corp and Supercom 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 Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Supercom.
Diversification Opportunities for Plexus Corp and Supercom
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Plexus and Supercom is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom 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 Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of Plexus Corp i.e., Plexus Corp and Supercom go up and down completely randomly.
Pair Corralation between Plexus Corp and Supercom
Given the investment horizon of 90 days Plexus Corp is expected to generate 0.6 times more return on investment than Supercom. However, Plexus Corp is 1.68 times less risky than Supercom. It trades about 0.2 of its potential returns per unit of risk. Supercom is currently generating about 0.03 per unit of risk. If you would invest 14,535 in Plexus Corp on August 30, 2024 and sell it today you would earn a total of 1,698 from holding Plexus Corp or generate 11.68% 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. Supercom
Performance |
| Timeline |
| Plexus Corp |
| Supercom |
Plexus Corp and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Supercom
The main advantage of trading using opposite Plexus Corp and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.| Plexus Corp vs. Celestica | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Flex | Plexus Corp vs. Jabil Circuit |
| Supercom vs. Fabrinet | Supercom vs. Knowles Cor | Supercom vs. Ubiquiti Networks | Supercom vs. AmpliTech Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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