Correlation Between Sanmina and Supercom
Can any of the company-specific risk be diversified away by investing in both Sanmina and Supercom 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 Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanmina and Supercom, you can compare the effects of market volatilities on Sanmina and Supercom 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 Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanmina and Supercom.
Diversification Opportunities for Sanmina and Supercom
Modest diversification
The 3 months correlation between Sanmina and Supercom is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sanmina and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom 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 Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of Sanmina i.e., Sanmina and Supercom go up and down completely randomly.
Pair Corralation between Sanmina and Supercom
Given the investment horizon of 90 days Sanmina is expected to generate 0.26 times more return on investment than Supercom. However, Sanmina is 3.83 times less risky than Supercom. It trades about 0.03 of its potential returns per unit of risk. Supercom is currently generating about -0.02 per unit of risk. If you would invest 6,422 in Sanmina on August 27, 2024 and sell it today you would earn a total of 1,519 from holding Sanmina or generate 23.65% 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. Supercom
Performance |
| Timeline |
| Sanmina |
| Supercom |
Sanmina and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanmina and Supercom
The main advantage of trading using opposite Sanmina and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanmina position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.| Sanmina vs. Benchmark Electronics | Sanmina vs. Methode Electronics | Sanmina vs. OSI Systems | Sanmina vs. Celestica |
| Supercom vs. Plexus Corp | Supercom vs. Benchmark Electronics | Supercom vs. Jabil Circuit | Supercom vs. Sanmina |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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