Correlation Between Benchmark Electronics and Datang International
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Datang International 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 Datang International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Datang International Power, you can compare the effects of market volatilities on Benchmark Electronics and Datang International 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 Datang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Datang International.
Diversification Opportunities for Benchmark Electronics and Datang International
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Benchmark and Datang is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Datang International Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang International 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 Datang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang International has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Datang International go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Datang International
Assuming the 90 days horizon Benchmark Electronics is expected to generate 0.51 times more return on investment than Datang International. However, Benchmark Electronics is 1.94 times less risky than Datang International. It trades about -0.07 of its potential returns per unit of risk. Datang International Power is currently generating about -0.1 per unit of risk. If you would invest 4,562 in Benchmark Electronics on October 16, 2024 and sell it today you would lose (102.00) from holding Benchmark Electronics or give up 2.24% 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. Datang International Power
Performance |
| Timeline |
| Benchmark Electronics |
| Datang International |
Benchmark Electronics and Datang International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Datang International
The main advantage of trading using opposite Benchmark Electronics and Datang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Datang International 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 Datang International will offset losses from the drop in Datang International's long position.| Benchmark Electronics vs. Easy Software AG | Benchmark Electronics vs. Constellation Software | Benchmark Electronics vs. CanSino Biologics | Benchmark Electronics vs. YATRA ONLINE DL 0001 |
| Datang International vs. Benchmark Electronics | Datang International vs. G III Apparel Group | Datang International vs. Methode Electronics | Datang International vs. IMPERIAL TOBACCO |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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