Correlation Between Anixter International and Amphenol

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

By analyzing existing cross correlation between Anixter International and Amphenol, you can compare the effects of market volatilities on Anixter International and Amphenol 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 Anixter International with a short position of Amphenol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anixter International and Amphenol.

Diversification Opportunities for Anixter International and Amphenol

0.0

Correlation Coefficient

Anixter International  Amphenol

Pay attention - limited upside

The 3 months correlation between Anixter and Amphenol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Anixter International and Amphenol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphenol and Anixter International 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 Anixter International are associated (or correlated) with Amphenol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphenol has no effect on the direction of Anixter International i.e., Anixter International and Amphenol go up and down completely randomly.

Pair Corralation between Anixter International and Amphenol

If you would invest  11,306  in Amphenol on February 2, 2024 and sell it today you would earn a total of  630.00  from holding Amphenol or generate 5.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Anixter International  vs.  Amphenol

Anixter International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anixter International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Anixter International is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Amphenol

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amphenol are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Amphenol demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anixter International and Amphenol

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

The idea behind Anixter International and Amphenol 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.