Correlation Between Sanmina and Nkarta

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

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

Diversification Opportunities for Sanmina and Nkarta

0.23

Correlation Coefficient

Sanmina  Nkarta

Modest diversification

The 3 months correlation between Sanmina and Nkarta is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sanmina and Nkarta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nkarta Inc 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 Nkarta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nkarta Inc has no effect on the direction of Sanmina i.e., Sanmina and Nkarta go up and down completely randomly.

Pair Corralation between Sanmina and Nkarta

Given the investment horizon of 90 days Sanmina is expected to generate 0.91 times more return on investment than Nkarta. However, Sanmina is 1.1 times less risky than Nkarta. It trades about 0.19 of its potential returns per unit of risk. Nkarta Inc is currently generating about 0.07 per unit of risk. If you would invest  7,967  in Sanmina on May 7, 2025 and sell it today you would earn a total of  3,702  from holding Sanmina or generate 46.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Sanmina  vs.  Nkarta Inc

Sanmina

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sanmina are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Sanmina displayed solid returns over the last few months and may actually be approaching a breakup point.

Nkarta Inc

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Nkarta Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Nkarta showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sanmina and Nkarta

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

The idea behind Sanmina and Nkarta Inc 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.