Correlation Between Benchmark Electronics and Belden
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Belden 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 Benchmark Electronics and Belden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Belden Inc, you can compare the effects of market volatilities on Benchmark Electronics and Belden 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 Benchmark Electronics with a short position of Belden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Belden.
Diversification Opportunities for Benchmark Electronics and Belden
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Benchmark and Belden is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Belden Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belden Inc and Benchmark Electronics 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 Benchmark Electronics are associated (or correlated) with Belden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belden Inc has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Belden go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Belden
Considering the 90-day investment horizon Benchmark Electronics is expected to generate 0.96 times more return on investment than Belden. However, Benchmark Electronics is 1.04 times less risky than Belden. It trades about 0.06 of its potential returns per unit of risk. Belden Inc is currently generating about 0.05 per unit of risk. If you would invest 2,675 in Benchmark Electronics on August 30, 2024 and sell it today you would earn a total of 2,130 from holding Benchmark Electronics or generate 79.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. Belden Inc
Performance |
| Timeline |
| Benchmark Electronics |
| Belden Inc |
Benchmark Electronics and Belden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Belden
The main advantage of trading using opposite Benchmark Electronics and Belden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Belden 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 Belden will offset losses from the drop in Belden's long position.| Benchmark Electronics vs. Sanmina | Benchmark Electronics vs. Methode Electronics | Benchmark Electronics vs. OSI Systems | Benchmark Electronics vs. Celestica |
| Belden vs. Clearfield | Belden vs. Comtech Telecommunications Corp | Belden vs. Knowles Cor | Belden vs. Extreme Networks |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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