Correlation Between TE Connectivity and Sanmina
Can any of the company-specific risk be diversified away by investing in both TE Connectivity 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 TE Connectivity and Sanmina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TE Connectivity and Sanmina, you can compare the effects of market volatilities on TE Connectivity 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 TE Connectivity with a short position of Sanmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of TE Connectivity and Sanmina.
Diversification Opportunities for TE Connectivity and Sanmina
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TEL and Sanmina is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding TE Connectivity and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and TE Connectivity 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 TE Connectivity 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 TE Connectivity i.e., TE Connectivity and Sanmina go up and down completely randomly.
Pair Corralation between TE Connectivity and Sanmina
Considering the 90-day investment horizon TE Connectivity is expected to generate 2.89 times less return on investment than Sanmina. But when comparing it to its historical volatility, TE Connectivity is 2.07 times less risky than Sanmina. It trades about 0.06 of its potential returns per unit of risk. Sanmina is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,011 in Sanmina on August 26, 2024 and sell it today you would earn a total of 2,930 from holding Sanmina or generate 58.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TE Connectivity vs. Sanmina
Performance |
| Timeline |
| TE Connectivity |
| Sanmina |
TE Connectivity and Sanmina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TE Connectivity and Sanmina
The main advantage of trading using opposite TE Connectivity and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TE Connectivity 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.| TE Connectivity vs. Littelfuse | TE Connectivity vs. Fabrinet | TE Connectivity vs. Jabil Circuit | TE Connectivity vs. Sanmina |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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