Correlation Between Ebang International and Sanmina

Can any of the company-specific risk be diversified away by investing in both Ebang International 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 Ebang International and Sanmina into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ebang International Holdings and Sanmina, you can compare the effects of market volatilities on Ebang International 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 Ebang International with a short position of Sanmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebang International and Sanmina.

Diversification Opportunities for Ebang International and Sanmina

0.2

Correlation Coefficient

Ebang International  Sanmina

Modest diversification

The 3 months correlation between Ebang and Sanmina is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ebang International Holdings and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and Ebang International 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 Ebang International Holdings 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 Ebang International i.e., Ebang International and Sanmina go up and down completely randomly.

Pair Corralation between Ebang International and Sanmina

Given the investment horizon of 90 days Ebang International Holdings is expected to under-perform the Sanmina. In addition to that, Ebang International is 1.75 times more volatile than Sanmina. It trades about -0.16 of its total potential returns per unit of risk. Sanmina is currently generating about 0.02 per unit of volatility. If you would invest  7,564  in Sanmina on December 28, 2024 and sell it today you would earn a total of  101.00  from holding Sanmina or generate 1.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ebang International Holdings  vs.  Sanmina

Ebang International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ebang International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Sanmina

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sanmina are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Sanmina is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ebang International and Sanmina

The main advantage of trading using opposite Ebang International and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebang International 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.

The idea behind Ebang International Holdings and Sanmina pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.