Correlation Between Benchmark Electronics and VITA 34
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and VITA 34 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 VITA 34 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and VITA 34 AG, you can compare the effects of market volatilities on Benchmark Electronics and VITA 34 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 VITA 34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and VITA 34.
Diversification Opportunities for Benchmark Electronics and VITA 34
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Benchmark and VITA is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and VITA 34 AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITA 34 AG 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 VITA 34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITA 34 AG has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and VITA 34 go up and down completely randomly.
Pair Corralation between Benchmark Electronics and VITA 34
Assuming the 90 days horizon Benchmark Electronics is expected to generate 1.66 times more return on investment than VITA 34. However, Benchmark Electronics is 1.66 times more volatile than VITA 34 AG. It trades about 0.13 of its potential returns per unit of risk. VITA 34 AG is currently generating about -0.1 per unit of risk. If you would invest 4,200 in Benchmark Electronics on September 5, 2024 and sell it today you would earn a total of 340.00 from holding Benchmark Electronics or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Benchmark Electronics vs. VITA 34 AG
Performance |
| Timeline |
| Benchmark Electronics |
| VITA 34 AG |
Benchmark Electronics and VITA 34 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and VITA 34
The main advantage of trading using opposite Benchmark Electronics and VITA 34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, VITA 34 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 VITA 34 will offset losses from the drop in VITA 34's long position.| Benchmark Electronics vs. KCE EL PCL | Benchmark Electronics vs. Superior Plus Corp | Benchmark Electronics vs. NMI Holdings | Benchmark Electronics vs. Origin Agritech |
| VITA 34 vs. Insurance Australia Group | VITA 34 vs. Cogent Communications Holdings | VITA 34 vs. Gamma Communications plc | VITA 34 vs. Spirent Communications plc |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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