Correlation Between Sanmina and Airgain
Can any of the company-specific risk be diversified away by investing in both Sanmina and Airgain 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 Sanmina and Airgain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanmina and Airgain, you can compare the effects of market volatilities on Sanmina and Airgain 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 Sanmina with a short position of Airgain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanmina and Airgain.
Diversification Opportunities for Sanmina and Airgain
Very weak diversification
The 3 months correlation between Sanmina and Airgain is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sanmina and Airgain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airgain and Sanmina 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 Sanmina are associated (or correlated) with Airgain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airgain has no effect on the direction of Sanmina i.e., Sanmina and Airgain go up and down completely randomly.
Pair Corralation between Sanmina and Airgain
Given the investment horizon of 90 days Sanmina is expected to generate 0.98 times more return on investment than Airgain. However, Sanmina is 1.03 times less risky than Airgain. It trades about 0.22 of its potential returns per unit of risk. Airgain is currently generating about -0.1 per unit of risk. If you would invest 6,851 in Sanmina on August 28, 2024 and sell it today you would earn a total of 1,033 from holding Sanmina or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanmina vs. Airgain
Performance |
| Timeline |
| Sanmina |
| Airgain |
Sanmina and Airgain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanmina and Airgain
The main advantage of trading using opposite Sanmina and Airgain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanmina position performs unexpectedly, Airgain 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 Airgain will offset losses from the drop in Airgain's long position.| Sanmina vs. Benchmark Electronics | Sanmina vs. Methode Electronics | Sanmina vs. OSI Systems | Sanmina vs. Celestica |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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