Correlation Between NYSE Composite and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Benchmark Electronics, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Benchmark Electronics.
Diversification Opportunities for NYSE Composite and Benchmark Electronics
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Benchmark is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Benchmark Electronics go up and down completely randomly.
Pair Corralation between NYSE Composite and Benchmark Electronics
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.31 times more return on investment than Benchmark Electronics. However, NYSE Composite is 3.22 times less risky than Benchmark Electronics. It trades about 0.32 of its potential returns per unit of risk. Benchmark Electronics is currently generating about -0.12 per unit of risk. If you would invest 1,909,542 in NYSE Composite on November 3, 2024 and sell it today you would earn a total of 90,340 from holding NYSE Composite or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Benchmark Electronics
Performance |
| Timeline |
NYSE Composite and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Benchmark Electronics
Pair trading matchups for Benchmark Electronics
Pair Trading with NYSE Composite and Benchmark Electronics
The main advantage of trading using opposite NYSE Composite and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Arrow Electronics | NYSE Composite vs. Cirmaker Technology | NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Weibo Corp |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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