Correlation Between Flex and Amphenol

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

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

Diversification Opportunities for Flex and Amphenol

0.83

Correlation Coefficient

Flex  Amphenol

Very poor diversification

The 3 months correlation between Flex and Amphenol is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Flex and Amphenol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphenol and Flex 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 Flex are associated (or correlated) with Amphenol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphenol has no effect on the direction of Flex i.e., Flex and Amphenol go up and down completely randomly.

Pair Corralation between Flex and Amphenol

Given the investment horizon of 90 days Flex is expected to under-perform the Amphenol. In addition to that, Flex is 1.06 times more volatile than Amphenol. It trades about -0.07 of its total potential returns per unit of risk. Amphenol is currently generating about -0.01 per unit of volatility. If you would invest  6,932  in Amphenol on December 28, 2024 and sell it today you would lose (273.00) from holding Amphenol or give up 3.94% of portfolio value over 90 days.

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

Flex  vs.  Amphenol

Flex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flex 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Amphenol

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amphenol has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Amphenol is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Flex and Amphenol

The main advantage of trading using opposite Flex and Amphenol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flex position performs unexpectedly, Amphenol 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 Amphenol will offset losses from the drop in Amphenol's long position.

The idea behind Flex and Amphenol 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.