Correlation Between Saipem SpA and Benchmark Bankshares
Can any of the company-specific risk be diversified away by investing in both Saipem SpA and Benchmark Bankshares 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 Saipem SpA and Benchmark Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saipem SpA and Benchmark Bankshares, you can compare the effects of market volatilities on Saipem SpA and Benchmark Bankshares 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 Saipem SpA with a short position of Benchmark Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saipem SpA and Benchmark Bankshares.
Diversification Opportunities for Saipem SpA and Benchmark Bankshares
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Saipem and Benchmark is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Saipem SpA and Benchmark Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Bankshares and Saipem SpA 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 Saipem SpA are associated (or correlated) with Benchmark Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Bankshares has no effect on the direction of Saipem SpA i.e., Saipem SpA and Benchmark Bankshares go up and down completely randomly.
Pair Corralation between Saipem SpA and Benchmark Bankshares
Assuming the 90 days horizon Saipem SpA is expected to generate 1.59 times more return on investment than Benchmark Bankshares. However, Saipem SpA is 1.59 times more volatile than Benchmark Bankshares. It trades about 0.05 of its potential returns per unit of risk. Benchmark Bankshares is currently generating about 0.03 per unit of risk. If you would invest 130.00 in Saipem SpA on September 26, 2024 and sell it today you would earn a total of 126.00 from holding Saipem SpA or generate 96.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 88.1% |
Values | Daily Returns |
Saipem SpA vs. Benchmark Bankshares
Performance |
Timeline |
Saipem SpA |
Benchmark Bankshares |
Saipem SpA and Benchmark Bankshares Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Saipem SpA and Benchmark Bankshares
The main advantage of trading using opposite Saipem SpA and Benchmark Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saipem SpA position performs unexpectedly, Benchmark Bankshares 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 Bankshares will offset losses from the drop in Benchmark Bankshares' long position.Saipem SpA vs. SMG Industries | Saipem SpA vs. NXT Energy Solutions | Saipem SpA vs. Dawson Geophysical | Saipem SpA vs. Calfrac Well Services |
Benchmark Bankshares vs. Citizens Financial Corp | Benchmark Bankshares vs. Farmers Bancorp | Benchmark Bankshares vs. Alpine Banks of | Benchmark Bankshares vs. First Financial |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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