Correlation Between Benchmark Electronics and Simon Property
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Simon Property 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 Simon Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Simon Property Group, you can compare the effects of market volatilities on Benchmark Electronics and Simon Property 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 Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Simon Property.
Diversification Opportunities for Benchmark Electronics and Simon Property
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Benchmark and Simon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Simon Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simon Property 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 Simon Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simon Property Group has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Simon Property go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Simon Property
Assuming the 90 days horizon Benchmark Electronics is expected to generate 1.72 times less return on investment than Simon Property. In addition to that, Benchmark Electronics is 1.88 times more volatile than Simon Property Group. It trades about 0.12 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.38 per unit of volatility. If you would invest 15,335 in Simon Property Group on September 4, 2024 and sell it today you would earn a total of 2,045 from holding Simon Property Group or generate 13.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Benchmark Electronics vs. Simon Property Group
Performance |
| Timeline |
| Benchmark Electronics |
| Simon Property Group |
Benchmark Electronics and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Simon Property
The main advantage of trading using opposite Benchmark Electronics and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Simon Property 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 Simon Property will offset losses from the drop in Simon Property'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 |
| Simon Property vs. MeVis Medical Solutions | Simon Property vs. SAFETY MEDICAL PROD | Simon Property vs. Benchmark Electronics | Simon Property vs. AOI Electronics Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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