Correlation Between Plexus Corp and Flex

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

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

Diversification Opportunities for Plexus Corp and Flex

0.55

Correlation Coefficient

Plexus Corp  Flex

Very weak diversification

The 3 months correlation between Plexus and Flex is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Plexus Corp i.e., Plexus Corp and Flex go up and down completely randomly.

Pair Corralation between Plexus Corp and Flex

Given the investment horizon of 90 days Plexus Corp is expected to generate 4.77 times less return on investment than Flex. But when comparing it to its historical volatility, Plexus Corp is 2.01 times less risky than Flex. It trades about 0.04 of its potential returns per unit of risk. Flex is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,213  in Flex on May 3, 2025 and sell it today you would earn a total of  3,739  from holding Flex or generate 308.24% return on investment over 90 days.

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

Plexus Corp  vs.  Flex

Plexus Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Plexus Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Plexus Corp is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Flex

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Flex are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Flex showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Plexus Corp and Flex

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

The idea behind Plexus Corp and Flex 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.