Correlation Between TRADEGATE and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both TRADEGATE 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 TRADEGATE and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEGATE and Benchmark Electronics, you can compare the effects of market volatilities on TRADEGATE 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 TRADEGATE with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEGATE and Benchmark Electronics.
Diversification Opportunities for TRADEGATE and Benchmark Electronics
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TRADEGATE and Benchmark is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and TRADEGATE 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 TRADEGATE 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 TRADEGATE i.e., TRADEGATE and Benchmark Electronics go up and down completely randomly.
Pair Corralation between TRADEGATE and Benchmark Electronics
Assuming the 90 days trading horizon TRADEGATE is expected to under-perform the Benchmark Electronics. But the stock apears to be less risky and, when comparing its historical volatility, TRADEGATE is 7.67 times less risky than Benchmark Electronics. The stock trades about -0.14 of its potential returns per unit of risk. The Benchmark Electronics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,463 in Benchmark Electronics on October 12, 2024 and sell it today you would lose (23.00) from holding Benchmark Electronics or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEGATE vs. Benchmark Electronics
Performance |
| Timeline |
| TRADEGATE |
| Benchmark Electronics |
TRADEGATE and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEGATE and Benchmark Electronics
The main advantage of trading using opposite TRADEGATE and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEGATE 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.| TRADEGATE vs. Easy Software AG | TRADEGATE vs. Minerals Technologies | TRADEGATE vs. SOFI TECHNOLOGIES | TRADEGATE vs. Chuangs China Investments |
| Benchmark Electronics vs. Tradeweb Markets | Benchmark Electronics vs. TRADEGATE | Benchmark Electronics vs. Jacquet Metal Service | Benchmark Electronics vs. Treasury Wine Estates |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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