Correlation Between Benchmark Electronics and Mitsubishi
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Mitsubishi 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 Mitsubishi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Mitsubishi, you can compare the effects of market volatilities on Benchmark Electronics and Mitsubishi 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 Mitsubishi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Mitsubishi.
Diversification Opportunities for Benchmark Electronics and Mitsubishi
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Benchmark and Mitsubishi is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Mitsubishi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi 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 Mitsubishi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Mitsubishi go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Mitsubishi
Assuming the 90 days horizon Benchmark Electronics is expected to generate 1.18 times more return on investment than Mitsubishi. However, Benchmark Electronics is 1.18 times more volatile than Mitsubishi. It trades about 0.08 of its potential returns per unit of risk. Mitsubishi is currently generating about -0.07 per unit of risk. If you would invest 3,331 in Benchmark Electronics on September 3, 2024 and sell it today you would earn a total of 1,169 from holding Benchmark Electronics or generate 35.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. Mitsubishi
Performance |
| Timeline |
| Benchmark Electronics |
| Mitsubishi |
Benchmark Electronics and Mitsubishi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Mitsubishi
The main advantage of trading using opposite Benchmark Electronics and Mitsubishi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Mitsubishi 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 Mitsubishi will offset losses from the drop in Mitsubishi's long position.| Benchmark Electronics vs. GALENA MINING LTD | Benchmark Electronics vs. ATOSS SOFTWARE | Benchmark Electronics vs. Unity Software | Benchmark Electronics vs. Alfa Financial Software |
| Mitsubishi vs. New Residential Investment | Mitsubishi vs. Chuangs China Investments | Mitsubishi vs. Singapore Telecommunications Limited | Mitsubishi vs. SBA Communications Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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