Correlation Between Ringmetall and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Ringmetall 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 Ringmetall and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ringmetall SE and Benchmark Electronics, you can compare the effects of market volatilities on Ringmetall 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 Ringmetall with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ringmetall and Benchmark Electronics.
Diversification Opportunities for Ringmetall and Benchmark Electronics
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ringmetall and Benchmark is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ringmetall SE and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Ringmetall 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 Ringmetall SE 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 Ringmetall i.e., Ringmetall and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Ringmetall and Benchmark Electronics
Assuming the 90 days trading horizon Ringmetall SE is expected to generate 2.02 times more return on investment than Benchmark Electronics. However, Ringmetall is 2.02 times more volatile than Benchmark Electronics. It trades about 0.07 of its potential returns per unit of risk. Benchmark Electronics is currently generating about -0.18 per unit of risk. If you would invest 331.00 in Ringmetall SE on November 7, 2024 and sell it today you would earn a total of 14.00 from holding Ringmetall SE or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ringmetall SE vs. Benchmark Electronics
Performance |
| Timeline |
| Ringmetall SE |
| Benchmark Electronics |
Ringmetall and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ringmetall and Benchmark Electronics
The main advantage of trading using opposite Ringmetall and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ringmetall 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.| Ringmetall vs. The Trade Desk | Ringmetall vs. H2O Retailing | Ringmetall vs. Tradegate AG Wertpapierhandelsbank | Ringmetall vs. TRADELINK ELECTRON |
| Benchmark Electronics vs. Guangdong Investment Limited | Benchmark Electronics vs. ECHO INVESTMENT ZY | Benchmark Electronics vs. QINGCI GAMES INC | Benchmark Electronics vs. CONTAGIOUS GAMING 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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