Correlation Between Sanmina and Deswell Industries
Can any of the company-specific risk be diversified away by investing in both Sanmina and Deswell Industries 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 Deswell Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanmina and Deswell Industries, you can compare the effects of market volatilities on Sanmina and Deswell Industries 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 Deswell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanmina and Deswell Industries.
Diversification Opportunities for Sanmina and Deswell Industries
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sanmina and Deswell is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sanmina and Deswell Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deswell Industries 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 Deswell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deswell Industries has no effect on the direction of Sanmina i.e., Sanmina and Deswell Industries go up and down completely randomly.
Pair Corralation between Sanmina and Deswell Industries
Given the investment horizon of 90 days Sanmina is expected to generate 2.08 times more return on investment than Deswell Industries. However, Sanmina is 2.08 times more volatile than Deswell Industries. It trades about 0.22 of its potential returns per unit of risk. Deswell Industries is currently generating about 0.15 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanmina vs. Deswell Industries
Performance |
| Timeline |
| Sanmina |
| Deswell Industries |
Sanmina and Deswell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanmina and Deswell Industries
The main advantage of trading using opposite Sanmina and Deswell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanmina position performs unexpectedly, Deswell Industries 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 Deswell Industries will offset losses from the drop in Deswell Industries' long position.| Sanmina vs. Benchmark Electronics | Sanmina vs. Methode Electronics | Sanmina vs. OSI Systems | Sanmina vs. Celestica |
| Deswell Industries vs. Ieh Corp | Deswell Industries vs. LGL Group | Deswell Industries vs. Micropac Industries | Deswell Industries vs. SigmaTron International |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |