Correlation Between Sanmina and EPlus
Can any of the company-specific risk be diversified away by investing in both Sanmina and EPlus 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 EPlus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanmina and ePlus inc, you can compare the effects of market volatilities on Sanmina and EPlus 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 EPlus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanmina and EPlus.
Diversification Opportunities for Sanmina and EPlus
Very good diversification
The 3 months correlation between Sanmina and EPlus is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sanmina and ePlus inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ePlus 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 EPlus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ePlus inc has no effect on the direction of Sanmina i.e., Sanmina and EPlus go up and down completely randomly.
Pair Corralation between Sanmina and EPlus
Given the investment horizon of 90 days Sanmina is expected to generate 0.85 times more return on investment than EPlus. However, Sanmina is 1.17 times less risky than EPlus. It trades about 0.07 of its potential returns per unit of risk. ePlus inc is currently generating about 0.04 per unit of risk. If you would invest 6,688 in Sanmina on August 30, 2024 and sell it today you would earn a total of 1,179 from holding Sanmina or generate 17.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanmina vs. ePlus inc
Performance |
| Timeline |
| Sanmina |
| ePlus inc |
Sanmina and EPlus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanmina and EPlus
The main advantage of trading using opposite Sanmina and EPlus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanmina position performs unexpectedly, EPlus 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 EPlus will offset losses from the drop in EPlus' 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |