Correlation Between Benchmark Electronics and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and TRADEGATE 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 TRADEGATE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and TRADEGATE, you can compare the effects of market volatilities on Benchmark Electronics and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and TRADEGATE.
Diversification Opportunities for Benchmark Electronics and TRADEGATE
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Benchmark and TRADEGATE is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and TRADEGATE go up and down completely randomly.
Pair Corralation between Benchmark Electronics and TRADEGATE
Assuming the 90 days horizon Benchmark Electronics is expected to generate 8.68 times more return on investment than TRADEGATE. However, Benchmark Electronics is 8.68 times more volatile than TRADEGATE. It trades about 0.05 of its potential returns per unit of risk. TRADEGATE is currently generating about 0.0 per unit of risk. If you would invest 4,482 in Benchmark Electronics on October 19, 2024 and sell it today you would earn a total of 58.00 from holding Benchmark Electronics or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. TRADEGATE
Performance |
| Timeline |
| Benchmark Electronics |
| TRADEGATE |
Benchmark Electronics and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and TRADEGATE
The main advantage of trading using opposite Benchmark Electronics and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.| Benchmark Electronics vs. Marie Brizard Wine | Benchmark Electronics vs. Virtus Investment Partners | Benchmark Electronics vs. TRAINLINE PLC LS | Benchmark Electronics vs. MidCap Financial Investment |
| TRADEGATE vs. Austevoll Seafood ASA | TRADEGATE vs. Meiko Electronics Co | TRADEGATE vs. SENECA FOODS A | TRADEGATE vs. Benchmark Electronics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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