Correlation Between Benchmark Botanics and China SXT

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

By analyzing existing cross correlation between Benchmark Botanics and China SXT Pharmaceuticals, you can compare the effects of market volatilities on Benchmark Botanics and China SXT 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 China SXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Botanics and China SXT.

Diversification Opportunities for Benchmark Botanics and China SXT

0.0

Correlation Coefficient

Benchmark Botanics  China SXT

Pay attention - limited upside

The 3 months correlation between Benchmark and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Botanics and China SXT Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China SXT Pharmaceuticals 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 China SXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China SXT Pharmaceuticals has no effect on the direction of Benchmark Botanics i.e., Benchmark Botanics and China SXT go up and down completely randomly.

Pair Corralation between Benchmark Botanics and China SXT

If you would invest  43.00  in China SXT Pharmaceuticals on October 11, 2024 and sell it today you would earn a total of  6.00  from holding China SXT Pharmaceuticals or generate 13.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Benchmark Botanics  vs.  China SXT Pharmaceuticals

Benchmark Botanics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Benchmark Botanics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Benchmark Botanics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

China SXT Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China SXT Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, China SXT is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Benchmark Botanics and China SXT

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

The idea behind Benchmark Botanics and China SXT Pharmaceuticals 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.