Correlation Between Benchmark Electronics and DBS Group
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and DBS Group 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 DBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and DBS Group Holdings, you can compare the effects of market volatilities on Benchmark Electronics and DBS Group 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 DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and DBS Group.
Diversification Opportunities for Benchmark Electronics and DBS Group
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Benchmark and DBS is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings 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 DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and DBS Group go up and down completely randomly.
Pair Corralation between Benchmark Electronics and DBS Group
Assuming the 90 days horizon Benchmark Electronics is expected to generate 1.55 times more return on investment than DBS Group. However, Benchmark Electronics is 1.55 times more volatile than DBS Group Holdings. It trades about 0.13 of its potential returns per unit of risk. DBS Group Holdings is currently generating about 0.19 per unit of risk. If you would invest 4,120 in Benchmark Electronics on August 29, 2024 and sell it today you would earn a total of 360.00 from holding Benchmark Electronics or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. DBS Group Holdings
Performance |
| Timeline |
| Benchmark Electronics |
| DBS Group Holdings |
Benchmark Electronics and DBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and DBS Group
The main advantage of trading using opposite Benchmark Electronics and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, DBS Group 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 DBS Group will offset losses from the drop in DBS Group's long position.| Benchmark Electronics vs. Diamyd Medical AB | Benchmark Electronics vs. Aluminum of | Benchmark Electronics vs. Merit Medical Systems | Benchmark Electronics vs. AVITA Medical |
| DBS Group vs. Arrow Electronics | DBS Group vs. Benchmark Electronics | DBS Group vs. EAT WELL INVESTMENT | DBS Group vs. Strategic Investments AS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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