Correlation Between Benchmark Electronics and CDW Corp
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and CDW Corp 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 CDW Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and CDW Corp, you can compare the effects of market volatilities on Benchmark Electronics and CDW Corp 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 CDW Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and CDW Corp.
Diversification Opportunities for Benchmark Electronics and CDW Corp
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Benchmark and CDW is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and CDW Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corp 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 CDW Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corp has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and CDW Corp go up and down completely randomly.
Pair Corralation between Benchmark Electronics and CDW Corp
Considering the 90-day investment horizon Benchmark Electronics is expected to generate 1.08 times more return on investment than CDW Corp. However, Benchmark Electronics is 1.08 times more volatile than CDW Corp. It trades about 0.09 of its potential returns per unit of risk. CDW Corp is currently generating about -0.2 per unit of risk. If you would invest 4,430 in Benchmark Electronics on August 25, 2024 and sell it today you would earn a total of 387.00 from holding Benchmark Electronics or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. CDW Corp
Performance |
| Timeline |
| Benchmark Electronics |
| CDW Corp |
Benchmark Electronics and CDW Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and CDW Corp
The main advantage of trading using opposite Benchmark Electronics and CDW Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, CDW Corp 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 CDW Corp will offset losses from the drop in CDW Corp's long position.| Benchmark Electronics vs. Sanmina | Benchmark Electronics vs. Methode Electronics | Benchmark Electronics vs. OSI Systems | Benchmark Electronics vs. Celestica |
| CDW Corp vs. Plexus Corp | CDW Corp vs. Benchmark Electronics | CDW Corp vs. Jabil Circuit | CDW Corp vs. Sanmina |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |