Correlation Between Benchmark Electronics and Applied DNA

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

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

Diversification Opportunities for Benchmark Electronics and Applied DNA

-0.28

Correlation Coefficient

Benchmark Electronics  Applied DNA

Very good diversification

The 3 months correlation between Benchmark and Applied is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and Applied DNA Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied DNA Sciences 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 Applied DNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied DNA Sciences has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and Applied DNA go up and down completely randomly.

Pair Corralation between Benchmark Electronics and Applied DNA

Considering the 90-day investment horizon Benchmark Electronics is expected to under-perform the Applied DNA. But the stock apears to be less risky and, when comparing its historical volatility, Benchmark Electronics is 4.69 times less risky than Applied DNA. The stock trades about -0.02 of its potential returns per unit of risk. The Applied DNA Sciences is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  515.00  in Applied DNA Sciences on July 11, 2025 and sell it today you would earn a total of  47.00  from holding Applied DNA Sciences or generate 9.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Benchmark Electronics  vs.  Applied DNA Sciences

Benchmark Electronics

Risk-Adjusted Performance

Weakest

Over the last 90 days Benchmark Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Benchmark Electronics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Applied DNA Sciences

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Applied DNA Sciences are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, Applied DNA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Benchmark Electronics and Applied DNA

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

The idea behind Benchmark Electronics and Applied DNA Sciences 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.