Correlation Between Flex and Amphenol
Can any of the company-specific risk be diversified away by investing in both Flex 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 Flex and Amphenol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flex and Amphenol, you can compare the effects of market volatilities on Flex 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 Flex with a short position of Amphenol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flex and Amphenol.
Diversification Opportunities for Flex and Amphenol
Very poor diversification
The 3 months correlation between Flex and Amphenol is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Flex and Amphenol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphenol 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 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 Flex i.e., Flex and Amphenol go up and down completely randomly.
Pair Corralation between Flex and Amphenol
Given the investment horizon of 90 days Flex is expected to generate 20.19 times less return on investment than Amphenol. In addition to that, Flex is 1.73 times more volatile than Amphenol. It trades about 0.0 of its total potential returns per unit of risk. Amphenol is currently generating about 0.14 per unit of volatility. If you would invest 10,440 in Amphenol on January 20, 2024 and sell it today you would earn a total of 648.00 from holding Amphenol or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Flex vs. Amphenol
Performance |
| Timeline |
| Flex |
| Amphenol |
Flex and Amphenol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flex and Amphenol
The main advantage of trading using opposite Flex and Amphenol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flex 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.| Flex vs. Maximus | Flex vs. Network 1 Technologies | Flex vs. First Advantage Corp | Flex vs. BrightView Holdings |
| Amphenol vs. Maximus | Amphenol vs. Network 1 Technologies | Amphenol vs. First Advantage Corp | Amphenol vs. BrightView Holdings |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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