Correlation Between Benchmark Electronics and Sony
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Sony 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 Sony into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Sony Group, you can compare the effects of market volatilities on Benchmark Electronics and Sony 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 Sony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Sony.
Diversification Opportunities for Benchmark Electronics and Sony
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Benchmark and Sony is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group 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 Sony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Sony go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Sony
Assuming the 90 days horizon Benchmark Electronics is expected to under-perform the Sony. But the stock apears to be less risky and, when comparing its historical volatility, Benchmark Electronics is 1.08 times less risky than Sony. The stock trades about -0.11 of its potential returns per unit of risk. The Sony Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,060 in Sony Group on November 1, 2024 and sell it today you would earn a total of 40.00 from holding Sony Group or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. Sony Group
Performance |
| Timeline |
| Benchmark Electronics |
| Sony Group |
Benchmark Electronics and Sony Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Sony
The main advantage of trading using opposite Benchmark Electronics and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Sony 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 Sony will offset losses from the drop in Sony's long position.| Benchmark Electronics vs. American Homes 4 | Benchmark Electronics vs. CITY OFFICE REIT | Benchmark Electronics vs. HAVERTY FURNITURE A | Benchmark Electronics vs. Autohome ADR |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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