Correlation Between Rogers and Benchmark Electronics

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

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

Diversification Opportunities for Rogers and Benchmark Electronics

0.87

Correlation Coefficient

Rogers  Benchmark Electronics

Very poor diversification

The 3 months correlation between Rogers and Benchmark is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Rogers and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Rogers 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 Rogers 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 Rogers i.e., Rogers and Benchmark Electronics go up and down completely randomly.

Pair Corralation between Rogers and Benchmark Electronics

Considering the 90-day investment horizon Rogers is expected to under-perform the Benchmark Electronics. In addition to that, Rogers is 1.17 times more volatile than Benchmark Electronics. It trades about -0.28 of its total potential returns per unit of risk. Benchmark Electronics is currently generating about -0.1 per unit of volatility. If you would invest  4,549  in Benchmark Electronics on December 29, 2024 and sell it today you would lose (577.00) from holding Benchmark Electronics or give up 12.68% of portfolio value over 90 days.

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

Rogers  vs.  Benchmark Electronics

Rogers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rogers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators 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.

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 unfluctuating performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Rogers and Benchmark Electronics

The main advantage of trading using opposite Rogers and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers 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 Rogers 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.