Correlation Between Sanmina and Rogers

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

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

Diversification Opportunities for Sanmina and Rogers

0.8

Correlation Coefficient

Sanmina  Rogers

Very poor diversification

The 3 months correlation between Sanmina and Rogers is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sanmina and Rogers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers 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 Rogers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers has no effect on the direction of Sanmina i.e., Sanmina and Rogers go up and down completely randomly.

Pair Corralation between Sanmina and Rogers

Given the investment horizon of 90 days Sanmina is expected to under-perform the Rogers. But the stock apears to be less risky and, when comparing its historical volatility, Sanmina is 1.57 times less risky than Rogers. The stock trades about -0.09 of its potential returns per unit of risk. The Rogers is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  10,323  in Rogers on July 22, 2024 and sell it today you would earn a total of  146.00  from holding Rogers or generate 1.41% return on investment over 90 days.

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

Sanmina  vs.  Rogers

Sanmina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sanmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Sanmina is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Rogers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rogers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in November 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sanmina and Rogers

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

The idea behind Sanmina and Rogers 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.