Correlation Between Plexus Corp and Ieh Corp

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

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

Diversification Opportunities for Plexus Corp and Ieh Corp

0.84

Correlation Coefficient

Plexus Corp  Ieh Corp

Very poor diversification

The 3 months correlation between Plexus and Ieh is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Ieh Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ieh Corp and Plexus Corp 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 Plexus Corp are associated (or correlated) with Ieh Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ieh Corp has no effect on the direction of Plexus Corp i.e., Plexus Corp and Ieh Corp go up and down completely randomly.

Pair Corralation between Plexus Corp and Ieh Corp

Given the investment horizon of 90 days Plexus Corp is expected to generate 0.37 times more return on investment than Ieh Corp. However, Plexus Corp is 2.67 times less risky than Ieh Corp. It trades about -0.14 of its potential returns per unit of risk. Ieh Corp is currently generating about -0.07 per unit of risk. If you would invest  15,779  in Plexus Corp on December 27, 2024 and sell it today you would lose (2,780) from holding Plexus Corp or give up 17.62% of portfolio value over 90 days.

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

Plexus Corp  vs.  Ieh Corp

Plexus Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plexus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ieh Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ieh Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Plexus Corp and Ieh Corp

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

The idea behind Plexus Corp and Ieh Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.