Correlation Between Benchmark Electronics and Universal Display

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and Universal Display 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 Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and Universal Display, you can compare the effects of market volatilities on Benchmark Electronics and Universal Display 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 Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and Universal Display.

Diversification Opportunities for Benchmark Electronics and Universal Display

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Benchmark and Universal is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display 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 Universal Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Display has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Universal Display go up and down completely randomly.

Pair Corralation between Benchmark Electronics and Universal Display

Considering the 90-day investment horizon Benchmark Electronics is expected to generate 0.96 times more return on investment than Universal Display. However, Benchmark Electronics is 1.04 times less risky than Universal Display. It trades about 0.13 of its potential returns per unit of risk. Universal Display is currently generating about -0.05 per unit of risk. If you would invest  4,063  in Benchmark Electronics on September 3, 2024 and sell it today you would earn a total of  786.00  from holding Benchmark Electronics or generate 19.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Benchmark Electronics  vs.  Universal Display

 Performance 
       Timeline  
Benchmark Electronics 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
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. In spite of rather uncertain technical indicators, Benchmark Electronics exhibited solid returns over the last few months and may actually be approaching a breakup point.
Universal Display 

Risk-Adjusted Performance

0 of 100

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

Benchmark Electronics and Universal Display Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Benchmark Electronics and Universal Display

The main advantage of trading using opposite Benchmark Electronics and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, Universal Display 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 Universal Display will offset losses from the drop in Universal Display's long position.
The idea behind Benchmark Electronics and Universal Display 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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Money Managers
Screen money managers from public funds and ETFs managed around the world
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing