Correlation Between Benchmark Electronics and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Regions Financial 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 Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Regions Financial, you can compare the effects of market volatilities on Benchmark Electronics and Regions Financial 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Regions Financial.
Diversification Opportunities for Benchmark Electronics and Regions Financial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Benchmark and Regions is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Regions Financial go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Regions Financial
Assuming the 90 days horizon Benchmark Electronics is expected to generate 1.16 times more return on investment than Regions Financial. However, Benchmark Electronics is 1.16 times more volatile than Regions Financial. It trades about 0.06 of its potential returns per unit of risk. Regions Financial is currently generating about 0.04 per unit of risk. If you would invest 2,529 in Benchmark Electronics on September 2, 2024 and sell it today you would earn a total of 1,971 from holding Benchmark Electronics or generate 77.94% 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. Regions Financial
Performance |
| Timeline |
| Benchmark Electronics |
| Regions Financial |
Benchmark Electronics and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Regions Financial
The main advantage of trading using opposite Benchmark Electronics and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| Benchmark Electronics vs. PennantPark Investment | Benchmark Electronics vs. Japan Asia Investment | Benchmark Electronics vs. UNITED UTILITIES GR | Benchmark Electronics vs. NURAN WIRELESS INC |
| Regions Financial vs. DELTA AIR LINES | Regions Financial vs. SAFETY MEDICAL PROD | Regions Financial vs. Pentair plc | Regions Financial vs. Alaska Air Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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