Correlation Between Sanmina and Pure Storage
Can any of the company-specific risk be diversified away by investing in both Sanmina and Pure Storage 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 Sanmina and Pure Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanmina and Pure Storage, you can compare the effects of market volatilities on Sanmina and Pure Storage 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 Sanmina with a short position of Pure Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanmina and Pure Storage.
Diversification Opportunities for Sanmina and Pure Storage
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sanmina and Pure is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sanmina and Pure Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Storage and Sanmina 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 Sanmina are associated (or correlated) with Pure Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Storage has no effect on the direction of Sanmina i.e., Sanmina and Pure Storage go up and down completely randomly.
Pair Corralation between Sanmina and Pure Storage
Assuming the 90 days trading horizon Sanmina is expected to generate 0.67 times more return on investment than Pure Storage. However, Sanmina is 1.49 times less risky than Pure Storage. It trades about 0.08 of its potential returns per unit of risk. Pure Storage is currently generating about 0.02 per unit of risk. If you would invest 5,402 in Sanmina on December 5, 2024 and sell it today you would earn a total of 2,452 from holding Sanmina or generate 45.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sanmina vs. Pure Storage
Performance |
Timeline |
Sanmina |
Pure Storage |
Sanmina and Pure Storage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sanmina and Pure Storage
The main advantage of trading using opposite Sanmina and Pure Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanmina position performs unexpectedly, Pure Storage 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 Pure Storage will offset losses from the drop in Pure Storage's long position.Sanmina vs. Federal Agricultural Mortgage | Sanmina vs. Cairo Communication SpA | Sanmina vs. Chengdu PUTIAN Telecommunications | Sanmina vs. GEELY AUTOMOBILE |
Pure Storage vs. ALERION CLEANPOWER | Pure Storage vs. Zijin Mining Group | Pure Storage vs. NORTHISLE PERGOLD INC | Pure Storage vs. GOLDQUEST MINING |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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