Correlation Between STRAYER EDUCATION and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION 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 STRAYER EDUCATION and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and Benchmark Electronics, you can compare the effects of market volatilities on STRAYER EDUCATION 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 STRAYER EDUCATION with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and Benchmark Electronics.
Diversification Opportunities for STRAYER EDUCATION and Benchmark Electronics
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between STRAYER and Benchmark is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION i.e., STRAYER EDUCATION and Benchmark Electronics go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and Benchmark Electronics
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 2.03 times less return on investment than Benchmark Electronics. But when comparing it to its historical volatility, STRAYER EDUCATION is 1.15 times less risky than Benchmark Electronics. It trades about 0.04 of its potential returns per unit of risk. Benchmark Electronics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,393 in Benchmark Electronics on September 24, 2024 and sell it today you would earn a total of 2,007 from holding Benchmark Electronics or generate 83.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAYER EDUCATION vs. Benchmark Electronics
Performance |
| Timeline |
| STRAYER EDUCATION |
| Benchmark Electronics |
STRAYER EDUCATION and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and Benchmark Electronics
The main advantage of trading using opposite STRAYER EDUCATION and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION 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.| STRAYER EDUCATION vs. CAREER EDUCATION | STRAYER EDUCATION vs. American Public Education | STRAYER EDUCATION vs. Zoom Video Communications | STRAYER EDUCATION vs. MOVIE GAMES SA |
| Benchmark Electronics vs. Charoen Pokphand Foods | Benchmark Electronics vs. Jacquet Metal Service | Benchmark Electronics vs. CN MODERN DAIRY | Benchmark Electronics vs. INDOFOOD AGRI RES |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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