Correlation Between Sanmina and Interlink Electronics
Can any of the company-specific risk be diversified away by investing in both Sanmina and Interlink Electronics 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 Interlink Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanmina and Interlink Electronics, you can compare the effects of market volatilities on Sanmina and Interlink Electronics 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 Interlink Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanmina and Interlink Electronics.
Diversification Opportunities for Sanmina and Interlink Electronics
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sanmina and Interlink is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sanmina and Interlink Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Electronics 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 Interlink Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlink Electronics has no effect on the direction of Sanmina i.e., Sanmina and Interlink Electronics go up and down completely randomly.
Pair Corralation between Sanmina and Interlink Electronics
Given the investment horizon of 90 days Sanmina is expected to generate 4.88 times less return on investment than Interlink Electronics. But when comparing it to its historical volatility, Sanmina is 4.36 times less risky than Interlink Electronics. It trades about 0.26 of its potential returns per unit of risk. Interlink Electronics is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 612.00 in Interlink Electronics on November 3, 2024 and sell it today you would earn a total of 351.00 from holding Interlink Electronics or generate 57.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanmina vs. Interlink Electronics
Performance |
| Timeline |
| Sanmina |
| Interlink Electronics |
Sanmina and Interlink Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanmina and Interlink Electronics
The main advantage of trading using opposite Sanmina and Interlink Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanmina position performs unexpectedly, Interlink Electronics 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 Interlink Electronics will offset losses from the drop in Interlink Electronics' long position.| Sanmina vs. Benchmark Electronics | Sanmina vs. Methode Electronics | Sanmina vs. OSI Systems | Sanmina vs. Celestica |
| Interlink Electronics vs. Methode Electronics | Interlink Electronics vs. Bel Fuse A | Interlink Electronics vs. CTS Corporation | Interlink Electronics vs. MicroCloud Hologram |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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