Correlation Between Benchmark Electronics and Lion One
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Lion One 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 Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Lion One Metals, you can compare the effects of market volatilities on Benchmark Electronics and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Lion One.
Diversification Opportunities for Benchmark Electronics and Lion One
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Benchmark and Lion is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Lion One go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Lion One
Assuming the 90 days horizon Benchmark Electronics is expected to generate 0.92 times more return on investment than Lion One. However, Benchmark Electronics is 1.09 times less risky than Lion One. It trades about 0.14 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.17 per unit of risk. If you would invest 4,120 in Benchmark Electronics on August 28, 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 Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Benchmark Electronics vs. Lion One Metals
Performance |
| Timeline |
| Benchmark Electronics |
| Lion One Metals |
Benchmark Electronics and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Lion One
The main advantage of trading using opposite Benchmark Electronics and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One'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 |
| Lion One vs. Franco Nevada | Lion One vs. Agnico Eagle Mines | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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