Correlation Between Benchmark Electronics and Flex
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Flex 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 Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Flex, you can compare the effects of market volatilities on Benchmark Electronics and Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Flex.
Diversification Opportunities for Benchmark Electronics and Flex
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Benchmark and Flex is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Flex go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Flex
Considering the 90-day investment horizon Benchmark Electronics is expected to generate 2.0 times less return on investment than Flex. In addition to that, Benchmark Electronics is 1.15 times more volatile than Flex. It trades about 0.12 of its total potential returns per unit of risk. Flex is currently generating about 0.28 per unit of volatility. If you would invest 3,525 in Flex on August 27, 2024 and sell it today you would earn a total of 582.00 from holding Flex or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. Flex
Performance |
| Timeline |
| Benchmark Electronics |
| Flex |
Benchmark Electronics and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Flex
The main advantage of trading using opposite Benchmark Electronics and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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