Correlation Between CODERE ONLINE and Sanmina

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

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

Diversification Opportunities for CODERE ONLINE and Sanmina

-0.46

Correlation Coefficient

CODERE ONLINE  Sanmina

Very good diversification

The 3 months correlation between CODERE and Sanmina is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CODERE ONLINE LUX and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and CODERE ONLINE 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 CODERE ONLINE LUX 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 CODERE ONLINE i.e., CODERE ONLINE and Sanmina go up and down completely randomly.

Pair Corralation between CODERE ONLINE and Sanmina

Assuming the 90 days horizon CODERE ONLINE LUX is expected to under-perform the Sanmina. In addition to that, CODERE ONLINE is 1.19 times more volatile than Sanmina. It trades about -0.03 of its total potential returns per unit of risk. Sanmina is currently generating about 0.16 per unit of volatility. If you would invest  6,104  in Sanmina on September 18, 2024 and sell it today you would earn a total of  1,488  from holding Sanmina or generate 24.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

CODERE ONLINE LUX  vs.  Sanmina

CODERE ONLINE LUX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CODERE ONLINE LUX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CODERE ONLINE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sanmina

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sanmina are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sanmina reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CODERE ONLINE and Sanmina

The main advantage of trading using opposite CODERE ONLINE and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CODERE ONLINE 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 CODERE ONLINE LUX 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.