Correlation Between Hillcrest Energy and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Hillcrest Energy 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 Hillcrest Energy and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillcrest Energy Technologies and Benchmark Electronics, you can compare the effects of market volatilities on Hillcrest Energy 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 Hillcrest Energy with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillcrest Energy and Benchmark Electronics.
Diversification Opportunities for Hillcrest Energy and Benchmark Electronics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hillcrest and Benchmark is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hillcrest Energy Technologies and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Hillcrest Energy 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 Hillcrest Energy Technologies 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 Hillcrest Energy i.e., Hillcrest Energy and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Hillcrest Energy and Benchmark Electronics
Assuming the 90 days horizon Hillcrest Energy Technologies is expected to generate 2.69 times more return on investment than Benchmark Electronics. However, Hillcrest Energy is 2.69 times more volatile than Benchmark Electronics. It trades about 0.05 of its potential returns per unit of risk. Benchmark Electronics is currently generating about -0.12 per unit of risk. If you would invest 8.68 in Hillcrest Energy Technologies on November 3, 2024 and sell it today you would earn a total of 0.19 from holding Hillcrest Energy Technologies or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hillcrest Energy Technologies vs. Benchmark Electronics
Performance |
| Timeline |
| Hillcrest Energy Tec |
| Benchmark Electronics |
Hillcrest Energy and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillcrest Energy and Benchmark Electronics
The main advantage of trading using opposite Hillcrest Energy and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillcrest Energy 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.| Hillcrest Energy vs. Deswell Industries | Hillcrest Energy vs. Ostin Technology Group | Hillcrest Energy vs. Interlink Electronics | Hillcrest Energy vs. SigmaTron International |
| Benchmark Electronics vs. Sanmina | Benchmark Electronics vs. Methode Electronics | Benchmark Electronics vs. OSI Systems | Benchmark Electronics vs. Celestica |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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