Correlation Between Plexus Corp and Upbound
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Upbound 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 Upbound into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Upbound Group, you can compare the effects of market volatilities on Plexus Corp and Upbound 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 Upbound. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Upbound.
Diversification Opportunities for Plexus Corp and Upbound
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Plexus and Upbound is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Upbound Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upbound Group 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 Upbound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upbound Group has no effect on the direction of Plexus Corp i.e., Plexus Corp and Upbound go up and down completely randomly.
Pair Corralation between Plexus Corp and Upbound
Given the investment horizon of 90 days Plexus Corp is expected to generate 0.43 times more return on investment than Upbound. However, Plexus Corp is 2.33 times less risky than Upbound. It trades about -0.34 of its potential returns per unit of risk. Upbound Group is currently generating about -0.24 per unit of risk. If you would invest 14,355 in Plexus Corp on November 28, 2024 and sell it today you would lose (924.00) from holding Plexus Corp or give up 6.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. Upbound Group
Performance |
| Timeline |
| Plexus Corp |
| Upbound Group |
Plexus Corp and Upbound Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Upbound
The main advantage of trading using opposite Plexus Corp and Upbound positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Upbound 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 Upbound will offset losses from the drop in Upbound's long position.| Plexus Corp vs. Celestica | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Flex | Plexus Corp vs. Jabil Circuit |
| Upbound vs. JBG SMITH Properties | Upbound vs. Lincoln Electric Holdings | Upbound vs. Toro Co | Upbound vs. Rocky Brands |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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