Correlation Between Allied Motion and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Allied Motion 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 Allied Motion and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Motion Technologies and Benchmark Electronics, you can compare the effects of market volatilities on Allied Motion 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 Allied Motion with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Motion and Benchmark Electronics.
Diversification Opportunities for Allied Motion and Benchmark Electronics
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allied and Benchmark is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Allied Motion Technologies and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Allied Motion 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 Allied Motion Technologies 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 Allied Motion i.e., Allied Motion and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Allied Motion and Benchmark Electronics
If you would invest 4,517 in Benchmark Electronics on August 28, 2024 and sell it today you would earn a total of 330.00 from holding Benchmark Electronics or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Allied Motion Technologies vs. Benchmark Electronics
Performance |
| Timeline |
| Allied Motion Techno |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Benchmark Electronics |
Allied Motion and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Motion and Benchmark Electronics
The main advantage of trading using opposite Allied Motion and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Motion 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.| Allied Motion vs. Plexus Corp | Allied Motion vs. Sanmina | Allied Motion vs. Bel Fuse A | Allied Motion vs. Methode Electronics |
| Benchmark Electronics vs. Plexus Corp | Benchmark Electronics vs. Jabil Circuit | Benchmark Electronics vs. Sanmina | Benchmark Electronics vs. Methode Electronics |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |