Correlation Between Benchmark Botanics and Procaps Group

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

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

Diversification Opportunities for Benchmark Botanics and Procaps Group

0.57

Correlation Coefficient

Benchmark Botanics  Procaps Group

Very weak diversification

The 3 months correlation between Benchmark and Procaps is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Botanics and Procaps Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procaps Group SA and Benchmark Botanics 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 Botanics are associated (or correlated) with Procaps Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procaps Group SA has no effect on the direction of Benchmark Botanics i.e., Benchmark Botanics and Procaps Group go up and down completely randomly.

Pair Corralation between Benchmark Botanics and Procaps Group

Assuming the 90 days horizon Benchmark Botanics is expected to under-perform the Procaps Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Benchmark Botanics is 1.18 times less risky than Procaps Group. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Procaps Group SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  228.00  in Procaps Group SA on December 30, 2024 and sell it today you would lose (81.00) from holding Procaps Group SA or give up 35.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Benchmark Botanics  vs.  Procaps Group SA

Benchmark Botanics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Benchmark Botanics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Procaps Group SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Procaps Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak basic indicators, Procaps Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Benchmark Botanics and Procaps Group

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

The idea behind Benchmark Botanics and Procaps Group SA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.