Correlation Between GEAR4MUSIC and Sanmina

Can any of the company-specific risk be diversified away by investing in both GEAR4MUSIC 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 GEAR4MUSIC and Sanmina into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GEAR4MUSIC LS 10 and Sanmina, you can compare the effects of market volatilities on GEAR4MUSIC 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 GEAR4MUSIC with a short position of Sanmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEAR4MUSIC and Sanmina.

Diversification Opportunities for GEAR4MUSIC and Sanmina

0.0

Correlation Coefficient

GEAR4MUSIC  Sanmina

Pay attention - limited upside

The 3 months correlation between GEAR4MUSIC and Sanmina is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GEAR4MUSIC LS 10 and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and GEAR4MUSIC 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 GEAR4MUSIC LS 10 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 GEAR4MUSIC i.e., GEAR4MUSIC and Sanmina go up and down completely randomly.

Pair Corralation between GEAR4MUSIC and Sanmina

If you would invest (100.00) in Sanmina on October 24, 2024 and sell it today you would earn a total of  100.00  from holding Sanmina or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GEAR4MUSIC LS 10  vs.  Sanmina

GEAR4MUSIC LS 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GEAR4MUSIC LS 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sanmina

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sanmina are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Sanmina reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GEAR4MUSIC and Sanmina

The main advantage of trading using opposite GEAR4MUSIC and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEAR4MUSIC 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 GEAR4MUSIC LS 10 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.