Correlation Between Hillcrest Energy and Sanmina

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

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

Diversification Opportunities for Hillcrest Energy and Sanmina

-0.56

Correlation Coefficient

Hillcrest Energy  Sanmina

Excellent diversification

The 3 months correlation between Hillcrest and Sanmina is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hillcrest Energy Technologies and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and Hillcrest Energy 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 Hillcrest Energy Technologies 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 Hillcrest Energy i.e., Hillcrest Energy and Sanmina go up and down completely randomly.

Pair Corralation between Hillcrest Energy and Sanmina

Assuming the 90 days horizon Hillcrest Energy is expected to generate 6.24 times less return on investment than Sanmina. In addition to that, Hillcrest Energy is 2.89 times more volatile than Sanmina. It trades about 0.0 of its total potential returns per unit of risk. Sanmina is currently generating about 0.09 per unit of volatility. If you would invest  6,032  in Sanmina on September 3, 2024 and sell it today you would earn a total of  1,909  from holding Sanmina or generate 31.65% return on investment over 90 days.

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

Hillcrest Energy Technologies  vs.  Sanmina

Hillcrest Energy Tec

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sanmina

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sanmina are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Sanmina displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hillcrest Energy and Sanmina

The main advantage of trading using opposite Hillcrest Energy and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillcrest Energy 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 Hillcrest Energy Technologies 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.