Correlation Between Plexus Corp and Lees Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Lees Pharmaceutical 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 Lees Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Lees Pharmaceutical Holdings, you can compare the effects of market volatilities on Plexus Corp and Lees Pharmaceutical 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 Lees Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Lees Pharmaceutical.
Diversification Opportunities for Plexus Corp and Lees Pharmaceutical
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Plexus and Lees is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Lees Pharmaceutical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lees Pharmaceutical 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 Lees Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lees Pharmaceutical has no effect on the direction of Plexus Corp i.e., Plexus Corp and Lees Pharmaceutical go up and down completely randomly.
Pair Corralation between Plexus Corp and Lees Pharmaceutical
Given the investment horizon of 90 days Plexus Corp is expected to generate 0.02 times more return on investment than Lees Pharmaceutical. However, Plexus Corp is 55.63 times less risky than Lees Pharmaceutical. It trades about 0.06 of its potential returns per unit of risk. Lees Pharmaceutical Holdings is currently generating about -0.11 per unit of risk. If you would invest 9,983 in Plexus Corp on September 29, 2024 and sell it today you would earn a total of 5,796 from holding Plexus Corp or generate 58.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 22.27% |
Values | Daily Returns |
Plexus Corp vs. Lees Pharmaceutical Holdings
Performance |
Timeline |
Plexus Corp |
Lees Pharmaceutical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Plexus Corp and Lees Pharmaceutical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Plexus Corp and Lees Pharmaceutical
The main advantage of trading using opposite Plexus Corp and Lees Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Lees Pharmaceutical 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 Lees Pharmaceutical will offset losses from the drop in Lees Pharmaceutical's long position.Plexus Corp vs. Celestica | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Flex | Plexus Corp vs. Jabil Circuit |
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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.
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