Correlation Between TOKYO GAS and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both TOKYO GAS 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 TOKYO GAS and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOKYO GAS and Benchmark Electronics, you can compare the effects of market volatilities on TOKYO GAS 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 TOKYO GAS with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOKYO GAS and Benchmark Electronics.
Diversification Opportunities for TOKYO GAS and Benchmark Electronics
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TOKYO and Benchmark is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding TOKYO GAS and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and TOKYO GAS 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 TOKYO GAS 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 TOKYO GAS i.e., TOKYO GAS and Benchmark Electronics go up and down completely randomly.
Pair Corralation between TOKYO GAS and Benchmark Electronics
Assuming the 90 days trading horizon TOKYO GAS is expected to generate 0.81 times more return on investment than Benchmark Electronics. However, TOKYO GAS is 1.23 times less risky than Benchmark Electronics. It trades about 0.4 of its potential returns per unit of risk. Benchmark Electronics is currently generating about 0.13 per unit of risk. If you would invest 2,120 in TOKYO GAS on August 31, 2024 and sell it today you would earn a total of 580.00 from holding TOKYO GAS or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
TOKYO GAS vs. Benchmark Electronics
Performance |
| Timeline |
| TOKYO GAS |
| Benchmark Electronics |
TOKYO GAS and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOKYO GAS and Benchmark Electronics
The main advantage of trading using opposite TOKYO GAS and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOKYO GAS 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.| TOKYO GAS vs. Benchmark Electronics | TOKYO GAS vs. ARROW ELECTRONICS | TOKYO GAS vs. STORE ELECTRONIC | TOKYO GAS vs. ADRIATIC METALS LS 013355 |
| Benchmark Electronics vs. Plexus Corp | 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |