Correlation Between Sanmina and Belden
Can any of the company-specific risk be diversified away by investing in both Sanmina and Belden 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 Belden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanmina and Belden Inc, you can compare the effects of market volatilities on Sanmina and Belden 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 Belden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanmina and Belden.
Diversification Opportunities for Sanmina and Belden
Poor diversification
The 3 months correlation between Sanmina and Belden is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sanmina and Belden Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belden Inc 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 Belden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belden Inc has no effect on the direction of Sanmina i.e., Sanmina and Belden go up and down completely randomly.
Pair Corralation between Sanmina and Belden
Given the investment horizon of 90 days Sanmina is expected to generate 1.69 times less return on investment than Belden. In addition to that, Sanmina is 1.03 times more volatile than Belden Inc. It trades about 0.03 of its total potential returns per unit of risk. Belden Inc is currently generating about 0.05 per unit of volatility. If you would invest 7,525 in Belden Inc on August 30, 2024 and sell it today you would earn a total of 4,662 from holding Belden Inc or generate 61.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanmina vs. Belden Inc
Performance |
| Timeline |
| Sanmina |
| Belden Inc |
Sanmina and Belden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanmina and Belden
The main advantage of trading using opposite Sanmina and Belden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanmina position performs unexpectedly, Belden 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 Belden will offset losses from the drop in Belden's long position.| Sanmina vs. Benchmark Electronics | Sanmina vs. Methode Electronics | Sanmina vs. OSI Systems | Sanmina vs. Celestica |
| Belden vs. Clearfield | Belden vs. Comtech Telecommunications Corp | Belden vs. Knowles Cor | Belden vs. Extreme Networks |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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