Correlation Between Plexus Corp and KCE EL
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and KCE EL 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 KCE EL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and KCE EL PCL, you can compare the effects of market volatilities on Plexus Corp and KCE EL 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 KCE EL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and KCE EL.
Diversification Opportunities for Plexus Corp and KCE EL
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Plexus and KCE is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and KCE EL PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCE EL PCL 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 KCE EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCE EL PCL has no effect on the direction of Plexus Corp i.e., Plexus Corp and KCE EL go up and down completely randomly.
Pair Corralation between Plexus Corp and KCE EL
Assuming the 90 days horizon Plexus Corp is expected to generate 0.67 times more return on investment than KCE EL. However, Plexus Corp is 1.5 times less risky than KCE EL. It trades about -0.21 of its potential returns per unit of risk. KCE EL PCL is currently generating about -0.16 per unit of risk. If you would invest 15,400 in Plexus Corp on December 26, 2024 and sell it today you would lose (3,500) from holding Plexus Corp or give up 22.73% 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. KCE EL PCL
Performance |
Timeline |
Plexus Corp |
KCE EL PCL |
Plexus Corp and KCE EL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Plexus Corp and KCE EL
The main advantage of trading using opposite Plexus Corp and KCE EL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, KCE EL 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 KCE EL will offset losses from the drop in KCE EL's long position.Plexus Corp vs. Japan Post Insurance | Plexus Corp vs. THRACE PLASTICS | Plexus Corp vs. HANOVER INSURANCE | Plexus Corp vs. Applied Materials |
KCE EL vs. PennyMac Mortgage Investment | KCE EL vs. USU Software AG | KCE EL vs. Axway Software SA | KCE EL vs. FORMPIPE SOFTWARE AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |