Correlation Between Ieh Corp and Benchmark Electronics

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

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

Diversification Opportunities for Ieh Corp and Benchmark Electronics

-0.09

Correlation Coefficient

Ieh Corp  Benchmark Electronics

Good diversification

The 3 months correlation between Ieh and Benchmark is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ieh Corp and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Ieh Corp 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 Ieh Corp 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 Ieh Corp i.e., Ieh Corp and Benchmark Electronics go up and down completely randomly.

Pair Corralation between Ieh Corp and Benchmark Electronics

Given the investment horizon of 90 days Ieh Corp is expected to generate 3.73 times more return on investment than Benchmark Electronics. However, Ieh Corp is 3.73 times more volatile than Benchmark Electronics. It trades about 0.02 of its potential returns per unit of risk. Benchmark Electronics is currently generating about -0.11 per unit of risk. If you would invest  900.00  in Ieh Corp on November 20, 2024 and sell it today you would lose (50.00) from holding Ieh Corp or give up 5.56% of portfolio value over 90 days.

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

Ieh Corp  vs.  Benchmark Electronics

Ieh Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ieh Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical indicators, Ieh Corp may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Benchmark Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Benchmark Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Ieh Corp and Benchmark Electronics

The main advantage of trading using opposite Ieh Corp and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ieh Corp 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.

The idea behind Ieh Corp and Benchmark Electronics 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.