Correlation Between Benchmark Electronics and LGL
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and LGL 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 LGL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and LGL Group, you can compare the effects of market volatilities on Benchmark Electronics and LGL 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 LGL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and LGL.
Diversification Opportunities for Benchmark Electronics and LGL
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Benchmark and LGL is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and LGL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGL Group 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 LGL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGL Group has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and LGL go up and down completely randomly.
Pair Corralation between Benchmark Electronics and LGL
Considering the 90-day investment horizon Benchmark Electronics is expected to under-perform the LGL. But the stock apears to be less risky and, when comparing its historical volatility, Benchmark Electronics is 1.17 times less risky than LGL. The stock trades about -0.18 of its potential returns per unit of risk. The LGL Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 612.00 in LGL Group on November 5, 2024 and sell it today you would earn a total of 48.00 from holding LGL Group or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. LGL Group
Performance |
| Timeline |
| Benchmark Electronics |
| LGL Group |
Benchmark Electronics and LGL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and LGL
The main advantage of trading using opposite Benchmark Electronics and LGL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, LGL 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 LGL will offset losses from the drop in LGL's long position.| Benchmark Electronics vs. Sanmina | Benchmark Electronics vs. Methode Electronics | Benchmark Electronics vs. OSI Systems | Benchmark Electronics vs. Celestica |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |