Correlation Between Murata Manufacturing and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Murata Manufacturing 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 Murata Manufacturing and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murata Manufacturing Co and Benchmark Electronics, you can compare the effects of market volatilities on Murata Manufacturing 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 Murata Manufacturing with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murata Manufacturing and Benchmark Electronics.
Diversification Opportunities for Murata Manufacturing and Benchmark Electronics
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Murata and Benchmark is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Murata Manufacturing Co and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Murata Manufacturing 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 Murata Manufacturing Co 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 Murata Manufacturing i.e., Murata Manufacturing and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Murata Manufacturing and Benchmark Electronics
Assuming the 90 days horizon Murata Manufacturing is expected to generate 1.31 times less return on investment than Benchmark Electronics. In addition to that, Murata Manufacturing is 7.07 times more volatile than Benchmark Electronics. It trades about 0.02 of its total potential returns per unit of risk. Benchmark Electronics is currently generating about 0.17 per unit of volatility. If you would invest 4,700 in Benchmark Electronics on October 26, 2024 and sell it today you would earn a total of 186.00 from holding Benchmark Electronics or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Murata Manufacturing Co vs. Benchmark Electronics
Performance |
| Timeline |
| Murata Manufacturing |
| Benchmark Electronics |
Murata Manufacturing and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Murata Manufacturing and Benchmark Electronics
The main advantage of trading using opposite Murata Manufacturing and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murata Manufacturing 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.| Murata Manufacturing vs. OMRON Corp ADR | Murata Manufacturing vs. LGL Group | Murata Manufacturing vs. Data IO | Murata Manufacturing vs. Sanmina |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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