Correlation Between Via Optronics and Benchmark Electronics

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

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

Diversification Opportunities for Via Optronics and Benchmark Electronics

-0.66

Correlation Coefficient

Via Optronics  Benchmark Electronics

Excellent diversification

The 3 months correlation between Via and Benchmark is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Via Optronics Ag and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics and Via Optronics 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 Via Optronics Ag 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 Via Optronics i.e., Via Optronics and Benchmark Electronics go up and down completely randomly.

Pair Corralation between Via Optronics and Benchmark Electronics

If you would invest  4,313  in Benchmark Electronics on September 8, 2024 and sell it today you would earn a total of  449.00  from holding Benchmark Electronics or generate 10.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	2.27%
Values	Daily Returns

Via Optronics Ag  vs.  Benchmark Electronics

Via Optronics Ag

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Via Optronics Ag has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Via Optronics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Benchmark Electronics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Benchmark Electronics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Benchmark Electronics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Via Optronics and Benchmark Electronics

The main advantage of trading using opposite Via Optronics and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Optronics 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 Via Optronics Ag 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.