Correlation Between Ouster and Sanmina

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

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

Diversification Opportunities for Ouster and Sanmina

0.78

Correlation Coefficient

Ouster  Sanmina

Poor diversification

The 3 months correlation between Ouster and Sanmina is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ouster Inc and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina and Ouster 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 Ouster Inc are associated (or correlated) with Sanmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanmina has no effect on the direction of Ouster i.e., Ouster and Sanmina go up and down completely randomly.

Pair Corralation between Ouster and Sanmina

Given the investment horizon of 90 days Ouster Inc is expected to generate 2.96 times more return on investment than Sanmina. However, Ouster is 2.96 times more volatile than Sanmina. It trades about 0.17 of its potential returns per unit of risk. Sanmina is currently generating about 0.09 per unit of risk. If you would invest  594.00  in Ouster Inc on September 21, 2024 and sell it today you would earn a total of  448.00  from holding Ouster Inc or generate 75.42% return on investment over 90 days.

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

Ouster Inc  vs.  Sanmina

Ouster Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ouster Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Ouster unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sanmina

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sanmina are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Sanmina may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ouster and Sanmina

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

The idea behind Ouster Inc and Sanmina 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.