Correlation Between Aedas Homes and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Aedas Homes and Benchmark Electronics 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 Aedas Homes and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and Benchmark Electronics, you can compare the effects of market volatilities on Aedas Homes and Benchmark Electronics 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 Aedas Homes with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and Benchmark Electronics.
Diversification Opportunities for Aedas Homes and Benchmark Electronics
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aedas and Benchmark is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Aedas Homes 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 Aedas Homes SA are associated (or correlated) with Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of Aedas Homes i.e., Aedas Homes and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Aedas Homes and Benchmark Electronics
Assuming the 90 days horizon Aedas Homes SA is expected to generate 0.76 times more return on investment than Benchmark Electronics. However, Aedas Homes SA is 1.32 times less risky than Benchmark Electronics. It trades about 0.11 of its potential returns per unit of risk. Benchmark Electronics is currently generating about 0.07 per unit of risk. If you would invest 965.00 in Aedas Homes SA on September 18, 2024 and sell it today you would earn a total of 1,515 from holding Aedas Homes SA or generate 156.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aedas Homes SA vs. Benchmark Electronics
Performance |
| Timeline |
| Aedas Homes SA |
| Benchmark Electronics |
Aedas Homes and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedas Homes and Benchmark Electronics
The main advantage of trading using opposite Aedas Homes and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes position performs unexpectedly, Benchmark Electronics 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.| Aedas Homes vs. Lennar | Aedas Homes vs. Sekisui Chemical Co | Aedas Homes vs. Superior Plus Corp | Aedas Homes vs. SIVERS SEMICONDUCTORS AB |
| Benchmark Electronics vs. Superior Plus Corp | Benchmark Electronics vs. SIVERS SEMICONDUCTORS AB | Benchmark Electronics vs. Norsk Hydro ASA | Benchmark Electronics vs. Reliance Steel Aluminum |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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