Correlation Between Benchmark Electronics and AMAG Austria
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and AMAG Austria 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 AMAG Austria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and AMAG Austria Metall, you can compare the effects of market volatilities on Benchmark Electronics and AMAG Austria 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 AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and AMAG Austria.
Diversification Opportunities for Benchmark Electronics and AMAG Austria
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Benchmark and AMAG is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall 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 AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and AMAG Austria go up and down completely randomly.
Pair Corralation between Benchmark Electronics and AMAG Austria
Assuming the 90 days horizon Benchmark Electronics is expected to generate 1.58 times more return on investment than AMAG Austria. However, Benchmark Electronics is 1.58 times more volatile than AMAG Austria Metall. It trades about 0.06 of its potential returns per unit of risk. AMAG Austria Metall is currently generating about -0.03 per unit of risk. If you would invest 2,231 in Benchmark Electronics on November 7, 2024 and sell it today you would earn a total of 1,849 from holding Benchmark Electronics or generate 82.88% 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. AMAG Austria Metall
Performance |
| Timeline |
| Benchmark Electronics |
| AMAG Austria Metall |
Benchmark Electronics and AMAG Austria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and AMAG Austria
The main advantage of trading using opposite Benchmark Electronics and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, AMAG Austria 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 AMAG Austria will offset losses from the drop in AMAG Austria's long position.| Benchmark Electronics vs. Canadian Utilities Limited | Benchmark Electronics vs. Air Lease | Benchmark Electronics vs. UNITED UTILITIES GR | Benchmark Electronics vs. GEELY AUTOMOBILE |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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