Correlation Between Benchmark Electronics and IND+COMMBK CHINA
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and IND+COMMBK CHINA 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 IND+COMMBK CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and INDCOMMBK CHINA ADR20, you can compare the effects of market volatilities on Benchmark Electronics and IND+COMMBK CHINA 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 IND+COMMBK CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and IND+COMMBK CHINA.
Diversification Opportunities for Benchmark Electronics and IND+COMMBK CHINA
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Benchmark and IND+COMMBK is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and INDCOMMBK CHINA ADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDCOMMBK CHINA ADR20 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 IND+COMMBK CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDCOMMBK CHINA ADR20 has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and IND+COMMBK CHINA go up and down completely randomly.
Pair Corralation between Benchmark Electronics and IND+COMMBK CHINA
Assuming the 90 days horizon Benchmark Electronics is expected to generate 0.98 times more return on investment than IND+COMMBK CHINA. However, Benchmark Electronics is 1.02 times less risky than IND+COMMBK CHINA. It trades about 0.13 of its potential returns per unit of risk. INDCOMMBK CHINA ADR20 is currently generating about -0.06 per unit of risk. If you would invest 4,200 in Benchmark Electronics on September 5, 2024 and sell it today you would earn a total of 340.00 from holding Benchmark Electronics or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Benchmark Electronics vs. INDCOMMBK CHINA ADR20
Performance |
| Timeline |
| Benchmark Electronics |
| INDCOMMBK CHINA ADR20 |
Benchmark Electronics and IND+COMMBK CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and IND+COMMBK CHINA
The main advantage of trading using opposite Benchmark Electronics and IND+COMMBK CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, IND+COMMBK CHINA 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 IND+COMMBK CHINA will offset losses from the drop in IND+COMMBK CHINA's long position.| Benchmark Electronics vs. KCE EL PCL | Benchmark Electronics vs. Superior Plus Corp | Benchmark Electronics vs. NMI Holdings | Benchmark Electronics vs. Origin Agritech |
| IND+COMMBK CHINA vs. BOSTON BEER A | IND+COMMBK CHINA vs. Benchmark Electronics | IND+COMMBK CHINA vs. UMC Electronics Co | IND+COMMBK CHINA vs. LPKF Laser 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |