Correlation Between Supercom and Sanmina
Can any of the company-specific risk be diversified away by investing in both Supercom and Sanmina 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 Supercom and Sanmina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and Sanmina, you can compare the effects of market volatilities on Supercom and Sanmina 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 Supercom with a short position of Sanmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Sanmina.
Diversification Opportunities for Supercom and Sanmina
Very weak diversification
The 3 months correlation between Supercom and Sanmina is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and Supercom 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 Supercom are associated (or correlated) with Sanmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanmina has no effect on the direction of Supercom i.e., Supercom and Sanmina go up and down completely randomly.
Pair Corralation between Supercom and Sanmina
Given the investment horizon of 90 days Supercom is expected to generate 5.74 times more return on investment than Sanmina. However, Supercom is 5.74 times more volatile than Sanmina. It trades about 0.22 of its potential returns per unit of risk. Sanmina is currently generating about 0.26 per unit of risk. If you would invest 768.00 in Supercom on November 3, 2024 and sell it today you would earn a total of 386.00 from holding Supercom or generate 50.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supercom vs. Sanmina
Performance |
| Timeline |
| Supercom |
| Sanmina |
Supercom and Sanmina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and Sanmina
The main advantage of trading using opposite Supercom and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom position performs unexpectedly, Sanmina 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 Sanmina will offset losses from the drop in Sanmina's long position.| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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