Correlation Between Q2M Managementberatu and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Q2M Managementberatu 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 Q2M Managementberatu and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Q2M Managementberatung AG and Benchmark Electronics, you can compare the effects of market volatilities on Q2M Managementberatu 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 Q2M Managementberatu with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2M Managementberatu and Benchmark Electronics.
Diversification Opportunities for Q2M Managementberatu and Benchmark Electronics
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Q2M and Benchmark is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Q2M Managementberatung AG and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Q2M Managementberatu 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 Q2M Managementberatung AG 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 Q2M Managementberatu i.e., Q2M Managementberatu and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Q2M Managementberatu and Benchmark Electronics
Assuming the 90 days trading horizon Q2M Managementberatung AG is expected to under-perform the Benchmark Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Q2M Managementberatung AG is 7.34 times less risky than Benchmark Electronics. The stock trades about -0.13 of its potential returns per unit of risk. The Benchmark Electronics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,626 in Benchmark Electronics on November 7, 2024 and sell it today you would earn a total of 1,454 from holding Benchmark Electronics or generate 55.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Q2M Managementberatung AG vs. Benchmark Electronics
Performance |
| Timeline |
| Q2M Managementberatung |
| Benchmark Electronics |
Q2M Managementberatu and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Q2M Managementberatu and Benchmark Electronics
The main advantage of trading using opposite Q2M Managementberatu and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2M Managementberatu 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.| Q2M Managementberatu vs. Citic Telecom International | Q2M Managementberatu vs. Zijin Mining Group | Q2M Managementberatu vs. GALENA MINING LTD | Q2M Managementberatu vs. East Africa Metals |
| Benchmark Electronics vs. Canadian Utilities Limited | Benchmark Electronics vs. Air Lease | Benchmark Electronics vs. UNITED UTILITIES GR | Benchmark Electronics vs. GEELY AUTOMOBILE |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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