Correlation Between KCE EL and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both KCE EL 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 KCE EL and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KCE EL PCL and Benchmark Electronics, you can compare the effects of market volatilities on KCE EL 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 KCE EL with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE EL and Benchmark Electronics.
Diversification Opportunities for KCE EL and Benchmark Electronics
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KCE and Benchmark is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding KCE EL PCL and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and KCE EL 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 KCE EL PCL 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 KCE EL i.e., KCE EL and Benchmark Electronics go up and down completely randomly.
Pair Corralation between KCE EL and Benchmark Electronics
Assuming the 90 days trading horizon KCE EL PCL is expected to under-perform the Benchmark Electronics. In addition to that, KCE EL is 1.12 times more volatile than Benchmark Electronics. It trades about -0.42 of its total potential returns per unit of risk. Benchmark Electronics is currently generating about 0.13 per unit of volatility. 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 | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
KCE EL PCL vs. Benchmark Electronics
Performance |
| Timeline |
| KCE EL PCL |
| Benchmark Electronics |
KCE EL and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE EL and Benchmark Electronics
The main advantage of trading using opposite KCE EL and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE EL 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.| KCE EL vs. CDN IMPERIAL BANK | KCE EL vs. Norwegian Air Shuttle | KCE EL vs. MYFAIR GOLD P | KCE EL vs. SEALED AIR |
| Benchmark Electronics vs. KCE EL PCL | Benchmark Electronics vs. Superior Plus Corp | Benchmark Electronics vs. NMI Holdings | Benchmark Electronics vs. Origin Agritech |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Positions Ratings 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 | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |