Correlation Between Benchmark Electronics and UMC Electronics
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and UMC Electronics 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 UMC Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and UMC Electronics Co, you can compare the effects of market volatilities on Benchmark Electronics and UMC Electronics 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 UMC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and UMC Electronics.
Diversification Opportunities for Benchmark Electronics and UMC Electronics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Benchmark and UMC is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and UMC Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMC Electronics 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 UMC Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMC Electronics has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and UMC Electronics go up and down completely randomly.
Pair Corralation between Benchmark Electronics and UMC Electronics
Assuming the 90 days horizon Benchmark Electronics is expected to generate 0.93 times more return on investment than UMC Electronics. However, Benchmark Electronics is 1.07 times less risky than UMC Electronics. It trades about 0.09 of its potential returns per unit of risk. UMC Electronics Co is currently generating about -0.05 per unit of risk. If you would invest 2,312 in Benchmark Electronics on August 28, 2024 and sell it today you would earn a total of 2,168 from holding Benchmark Electronics or generate 93.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. UMC Electronics Co
Performance |
| Timeline |
| Benchmark Electronics |
| UMC Electronics |
Benchmark Electronics and UMC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and UMC Electronics
The main advantage of trading using opposite Benchmark Electronics and UMC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, UMC Electronics 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 UMC Electronics will offset losses from the drop in UMC Electronics' long position.| Benchmark Electronics vs. Diamyd Medical AB | Benchmark Electronics vs. Aluminum of | Benchmark Electronics vs. Merit Medical Systems | Benchmark Electronics vs. AVITA Medical |
| UMC Electronics vs. CECO ENVIRONMENTAL | UMC Electronics vs. Datadog | UMC Electronics vs. Hyrican Informationssysteme Aktiengesellschaft | UMC Electronics vs. Perma Fix Environmental Services |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |