Correlation Between Virtus Investment and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both Virtus Investment 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 Virtus Investment and Benchmark Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Investment Partners and Benchmark Electronics, you can compare the effects of market volatilities on Virtus Investment 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 Virtus Investment with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Investment and Benchmark Electronics.
Diversification Opportunities for Virtus Investment and Benchmark Electronics
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and Benchmark is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Virtus Investment 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 Virtus Investment Partners 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 Virtus Investment i.e., Virtus Investment and Benchmark Electronics go up and down completely randomly.
Pair Corralation between Virtus Investment and Benchmark Electronics
Assuming the 90 days horizon Virtus Investment Partners is expected to under-perform the Benchmark Electronics. In addition to that, Virtus Investment is 1.03 times more volatile than Benchmark Electronics. It trades about -0.16 of its total potential returns per unit of risk. Benchmark Electronics is currently generating about 0.05 per unit of volatility. If you would invest 4,403 in Benchmark Electronics on October 19, 2024 and sell it today you would earn a total of 137.00 from holding Benchmark Electronics or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Investment Partners vs. Benchmark Electronics
Performance |
| Timeline |
| Virtus Investment |
| Benchmark Electronics |
Virtus Investment and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Investment and Benchmark Electronics
The main advantage of trading using opposite Virtus Investment and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Investment 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.| Virtus Investment vs. GRUPO CARSO A1 | Virtus Investment vs. THAI BEVERAGE | Virtus Investment vs. CN MODERN DAIRY | Virtus Investment vs. MOLSON RS BEVERAGE |
| Benchmark Electronics vs. Marie Brizard Wine | Benchmark Electronics vs. Virtus Investment Partners | Benchmark Electronics vs. TRAINLINE PLC LS | Benchmark Electronics vs. MidCap Financial Investment |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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