Correlation Between Benchmark Electronics and Comtech Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Comtech Telecommunicatio 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 Comtech Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Comtech Telecommunications Corp, you can compare the effects of market volatilities on Benchmark Electronics and Comtech Telecommunicatio 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 Comtech Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Comtech Telecommunicatio.
Diversification Opportunities for Benchmark Electronics and Comtech Telecommunicatio
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Benchmark and Comtech is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio 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 Comtech Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtech Telecommunicatio has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Comtech Telecommunicatio go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Comtech Telecommunicatio
Considering the 90-day investment horizon Benchmark Electronics is expected to generate 1.15 times less return on investment than Comtech Telecommunicatio. But when comparing it to its historical volatility, Benchmark Electronics is 9.49 times less risky than Comtech Telecommunicatio. It trades about 0.19 of its potential returns per unit of risk. Comtech Telecommunications Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 301.00 in Comtech Telecommunications Corp on October 20, 2024 and sell it today you would lose (38.00) from holding Comtech Telecommunications Corp or give up 12.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. Comtech Telecommunications Cor
Performance |
| Timeline |
| Benchmark Electronics |
| Comtech Telecommunicatio |
Benchmark Electronics and Comtech Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Comtech Telecommunicatio
The main advantage of trading using opposite Benchmark Electronics and Comtech Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Comtech Telecommunicatio 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 Comtech Telecommunicatio will offset losses from the drop in Comtech Telecommunicatio's long position.| Benchmark Electronics vs. Sanmina | Benchmark Electronics vs. Methode Electronics | Benchmark Electronics vs. OSI Systems | Benchmark Electronics vs. Celestica |
| Comtech Telecommunicatio vs. KVH Industries | Comtech Telecommunicatio vs. Aviat Networks | Comtech Telecommunicatio vs. Harmonic | Comtech Telecommunicatio vs. Telesat Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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