Correlation Between Flex and Avnet

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Flex and Avnet 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 Flex and Avnet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flex and Avnet Inc, you can compare the effects of market volatilities on Flex and Avnet 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 Flex with a short position of Avnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flex and Avnet.

Diversification Opportunities for Flex and Avnet

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between Flex and Avnet is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Flex and Avnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avnet Inc and Flex 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 Flex are associated (or correlated) with Avnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avnet Inc has no effect on the direction of Flex i.e., Flex and Avnet go up and down completely randomly.

Pair Corralation between Flex and Avnet

Given the investment horizon of 90 days Flex is expected to generate 1.27 times more return on investment than Avnet. However, Flex is 1.27 times more volatile than Avnet Inc. It trades about 0.09 of its potential returns per unit of risk. Avnet Inc is currently generating about 0.05 per unit of risk. If you would invest  1,226  in Flex on December 29, 2023 and sell it today you would earn a total of  1,637  from holding Flex or generate 133.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Flex  vs.  Avnet Inc

 Performance 
       Timeline  
Flex 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Flex are ranked lower than 14 (%) 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.
Avnet Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Avnet Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Avnet is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Flex and Avnet Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Flex and Avnet

The main advantage of trading using opposite Flex and Avnet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flex position performs unexpectedly, Avnet 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 Avnet will offset losses from the drop in Avnet's long position.
The idea behind Flex and Avnet 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.
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

Other Complementary Tools

FinTech Suite
Use AI to screen and filter profitable investment opportunities
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Bonds Directory
Find actively traded corporate debentures issued by US companies
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Equity Valuation
Check real value of public entities based on technical and fundamental data
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Fundamental Analysis
View fundamental data based on most recent published financial statements
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities