Correlation Between Benchmark Electronics and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Sekisui Chemical 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 Sekisui Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Sekisui Chemical Co, you can compare the effects of market volatilities on Benchmark Electronics and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Sekisui Chemical.
Diversification Opportunities for Benchmark Electronics and Sekisui Chemical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Benchmark and Sekisui is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Sekisui Chemical go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Sekisui Chemical
Assuming the 90 days horizon Benchmark Electronics is expected to generate 1.36 times more return on investment than Sekisui Chemical. However, Benchmark Electronics is 1.36 times more volatile than Sekisui Chemical Co. It trades about 0.13 of its potential returns per unit of risk. Sekisui Chemical Co is currently generating about 0.09 per unit of risk. If you would invest 3,960 in Benchmark Electronics on August 31, 2024 and sell it today you would earn a total of 580.00 from holding Benchmark Electronics or generate 14.65% 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. Sekisui Chemical Co
Performance |
| Timeline |
| Benchmark Electronics |
| Sekisui Chemical |
Benchmark Electronics and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Sekisui Chemical
The main advantage of trading using opposite Benchmark Electronics and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical's long position.| Benchmark Electronics vs. Plexus Corp | Benchmark Electronics vs. Superior Plus Corp | Benchmark Electronics vs. NMI Holdings | Benchmark Electronics vs. Origin Agritech |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |