Correlation Between Benchmark Electronics and AT S

Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and AT S 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 Benchmark Electronics and AT S into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Benchmark Electronics and AT S Austria, you can compare the effects of market volatilities on Benchmark Electronics and AT S 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 Benchmark Electronics with a short position of AT S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and AT S.

Diversification Opportunities for Benchmark Electronics and AT S

0.15

Correlation Coefficient

Benchmark Electronics  AT S

Average diversification

The 3 months correlation between Benchmark and ASAAF is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria and Benchmark Electronics 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 Benchmark Electronics are associated (or correlated) with AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and AT S go up and down completely randomly.

Pair Corralation between Benchmark Electronics and AT S

Considering the 90-day investment horizon Benchmark Electronics is expected to generate 0.79 times more return on investment than AT S. However, Benchmark Electronics is 1.26 times less risky than AT S. It trades about 0.11 of its potential returns per unit of risk. AT S Austria is currently generating about -0.05 per unit of risk. If you would invest  2,559  in Benchmark Electronics on September 4, 2024 and sell it today you would earn a total of  2,336  from holding Benchmark Electronics or generate 91.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Benchmark Electronics  vs.  AT S Austria

Benchmark Electronics

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Benchmark Electronics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Benchmark Electronics exhibited solid returns over the last few months and may actually be approaching a breakup point.

AT S Austria

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AT S Austria are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, AT S may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Benchmark Electronics and AT S

The main advantage of trading using opposite Benchmark Electronics and AT S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, AT S 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 AT S will offset losses from the drop in AT S's long position.

The idea behind Benchmark Electronics and AT S Austria pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.