Correlation Between Hisense Home and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Hisense Home and Benchmark 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 Hisense Home and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hisense Home Appliances and Benchmark Electronics, you can compare the effects of market volatilities on Hisense Home and Benchmark 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 Hisense Home with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and Benchmark Electronics.
Diversification Opportunities for Hisense Home and Benchmark Electronics
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hisense and Benchmark is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Hisense Home 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 Hisense Home Appliances are associated (or correlated) with Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of Hisense Home i.e., Hisense Home and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Hisense Home and Benchmark Electronics
Assuming the 90 days horizon Hisense Home Appliances is expected to generate 1.76 times more return on investment than Benchmark Electronics. However, Hisense Home is 1.76 times more volatile than Benchmark Electronics. It trades about 0.1 of its potential returns per unit of risk. Benchmark Electronics is currently generating about 0.06 per unit of risk. If you would invest 65.00 in Hisense Home Appliances on October 11, 2024 and sell it today you would earn a total of 265.00 from holding Hisense Home Appliances or generate 407.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. Benchmark Electronics
Performance |
| Timeline |
| Hisense Home Appliances |
| Benchmark Electronics |
Hisense Home and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and Benchmark Electronics
The main advantage of trading using opposite Hisense Home and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home position performs unexpectedly, Benchmark 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.| Hisense Home vs. GAMING FAC SA | Hisense Home vs. FRACTAL GAMING GROUP | Hisense Home vs. Firan Technology Group | Hisense Home vs. AECOM TECHNOLOGY |
| Benchmark Electronics vs. Hisense Home Appliances | Benchmark Electronics vs. PROSIEBENSAT1 MEDIADR4 | Benchmark Electronics vs. Corporate Office Properties | Benchmark Electronics vs. Nexstar Media Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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