Correlation Between Benchmark Electronics and Mitie Group

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

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

Diversification Opportunities for Benchmark Electronics and Mitie Group

0.0

Correlation Coefficient

Benchmark Electronics  Mitie Group

Pay attention - limited upside

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

Pair Corralation between Benchmark Electronics and Mitie Group

If you would invest  3,940  in Benchmark Electronics on October 1, 2024 and sell it today you would earn a total of  580.00  from holding Benchmark Electronics or generate 14.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Benchmark Electronics  vs.  Mitie Group PLC

Benchmark Electronics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Benchmark Electronics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Benchmark Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Mitie Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitie Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Benchmark Electronics and Mitie Group

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

The idea behind Benchmark Electronics and Mitie Group PLC 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.