Correlation Between Bayer Aktiengesellscha and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Bayer Aktiengesellscha 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 Bayer Aktiengesellscha and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayer Aktiengesellschaft and Benchmark Electronics, you can compare the effects of market volatilities on Bayer Aktiengesellscha 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 Bayer Aktiengesellscha with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayer Aktiengesellscha and Benchmark Electronics.
Diversification Opportunities for Bayer Aktiengesellscha and Benchmark Electronics
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayer and Benchmark is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bayer Aktiengesellschaft and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Bayer Aktiengesellscha 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 Bayer Aktiengesellschaft 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 Bayer Aktiengesellscha i.e., Bayer Aktiengesellscha and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Bayer Aktiengesellscha and Benchmark Electronics
Assuming the 90 days trading horizon Bayer Aktiengesellschaft is expected to under-perform the Benchmark Electronics. In addition to that, Bayer Aktiengesellscha is 1.49 times more volatile than Benchmark Electronics. It trades about -0.16 of its total potential returns per unit of risk. Benchmark Electronics is currently generating about 0.15 per unit of volatility. If you would invest 4,100 in Benchmark Electronics on September 1, 2024 and sell it today you would earn a total of 420.00 from holding Benchmark Electronics or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bayer Aktiengesellschaft vs. Benchmark Electronics
Performance |
| Timeline |
| Bayer Aktiengesellschaft |
| Benchmark Electronics |
Bayer Aktiengesellscha and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayer Aktiengesellscha and Benchmark Electronics
The main advantage of trading using opposite Bayer Aktiengesellscha and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayer Aktiengesellscha 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.| Bayer Aktiengesellscha vs. Roche Holding Ltd | Bayer Aktiengesellscha vs. Amgen Inc | Bayer Aktiengesellscha vs. Bayer AG NA | Bayer Aktiengesellscha vs. Biogen Inc |
| Benchmark Electronics vs. METHODE ELECTRONICS | Benchmark Electronics vs. Soken Chemical Engineering | Benchmark Electronics vs. KIMBALL ELECTRONICS | Benchmark Electronics vs. Quaker Chemical |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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