Correlation Between Benchmark Electronics and Sysco
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Sysco 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 Sysco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Sysco, you can compare the effects of market volatilities on Benchmark Electronics and Sysco 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 Sysco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Sysco.
Diversification Opportunities for Benchmark Electronics and Sysco
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Benchmark and Sysco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Sysco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco 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 Sysco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Sysco go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Sysco
Assuming the 90 days horizon Benchmark Electronics is expected to generate 1.95 times more return on investment than Sysco. However, Benchmark Electronics is 1.95 times more volatile than Sysco. It trades about 0.09 of its potential returns per unit of risk. Sysco is currently generating about 0.03 per unit of risk. If you would invest 2,199 in Benchmark Electronics on September 1, 2024 and sell it today you would earn a total of 2,321 from holding Benchmark Electronics or generate 105.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Benchmark Electronics vs. Sysco
Performance |
| Timeline |
| Benchmark Electronics |
| Sysco |
Benchmark Electronics and Sysco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Sysco
The main advantage of trading using opposite Benchmark Electronics and Sysco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Sysco 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 Sysco will offset losses from the drop in Sysco's long position.| Benchmark Electronics vs. METHODE ELECTRONICS | Benchmark Electronics vs. Soken Chemical Engineering | Benchmark Electronics vs. KIMBALL ELECTRONICS | Benchmark Electronics vs. Quaker Chemical |
| Sysco vs. Jernimo Martins SGPS | Sysco vs. Bunzl plc | Sysco vs. Performance Food Group | Sysco vs. US Foods Holding |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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