Correlation Between Benchmark Electronics and Compagnie

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

By analyzing existing cross correlation between Benchmark Electronics and Compagnie de Saint Gobain, you can compare the effects of market volatilities on Benchmark Electronics and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Compagnie.

Diversification Opportunities for Benchmark Electronics and Compagnie

0.0

Correlation Coefficient

Benchmark Electronics  Compagnie

Pay attention - limited upside

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

Pair Corralation between Benchmark Electronics and Compagnie

If you would invest  3,945  in Benchmark Electronics on October 24, 2024 and sell it today you would earn a total of  735.00  from holding Benchmark Electronics or generate 18.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Benchmark Electronics  vs.  Compagnie de Saint Gobain

Benchmark Electronics

Risk-Adjusted Performance

10 of 100

OK

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. Despite nearly unsteady basic indicators, Benchmark Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Compagnie de Saint

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Compagnie de Saint Gobain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Compagnie is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Benchmark Electronics and Compagnie

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

The idea behind Benchmark Electronics and Compagnie de Saint Gobain 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.