Correlation Between Benchmark Electronics and Scientific Games
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Scientific Games 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 Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Scientific Games, you can compare the effects of market volatilities on Benchmark Electronics and Scientific Games 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 Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Scientific Games.
Diversification Opportunities for Benchmark Electronics and Scientific Games
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Benchmark and Scientific is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games 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 Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Scientific Games go up and down completely randomly.
Pair Corralation between Benchmark Electronics and Scientific Games
Assuming the 90 days horizon Benchmark Electronics is expected to generate 1.06 times more return on investment than Scientific Games. However, Benchmark Electronics is 1.06 times more volatile than Scientific Games. It trades about 0.13 of its potential returns per unit of risk. Scientific Games is currently generating about 0.04 per unit of risk. If you would invest 4,120 in Benchmark Electronics on August 29, 2024 and sell it today you would earn a total of 360.00 from holding Benchmark Electronics or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. Scientific Games
Performance |
| Timeline |
| Benchmark Electronics |
| Scientific Games |
Benchmark Electronics and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and Scientific Games
The main advantage of trading using opposite Benchmark Electronics and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' long position.| Benchmark Electronics vs. Diamyd Medical AB | Benchmark Electronics vs. Aluminum of | Benchmark Electronics vs. Merit Medical Systems | Benchmark Electronics vs. AVITA Medical |
| Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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