Correlation Between StShine Optical and BenQ Medical
Can any of the company-specific risk be diversified away by investing in both StShine Optical and BenQ Medical 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 StShine Optical and BenQ Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StShine Optical Co and BenQ Medical Technology, you can compare the effects of market volatilities on StShine Optical and BenQ Medical 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 StShine Optical with a short position of BenQ Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of StShine Optical and BenQ Medical.
Diversification Opportunities for StShine Optical and BenQ Medical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between StShine and BenQ is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding StShine Optical Co and BenQ Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BenQ Medical Technology and StShine Optical 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 StShine Optical Co are associated (or correlated) with BenQ Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BenQ Medical Technology has no effect on the direction of StShine Optical i.e., StShine Optical and BenQ Medical go up and down completely randomly.
Pair Corralation between StShine Optical and BenQ Medical
Assuming the 90 days trading horizon StShine Optical Co is expected to generate 1.6 times more return on investment than BenQ Medical. However, StShine Optical is 1.6 times more volatile than BenQ Medical Technology. It trades about -0.07 of its potential returns per unit of risk. BenQ Medical Technology is currently generating about -0.34 per unit of risk. If you would invest 19,400 in StShine Optical Co on November 5, 2024 and sell it today you would lose (350.00) from holding StShine Optical Co or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
StShine Optical Co vs. BenQ Medical Technology
Performance |
| Timeline |
| StShine Optical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BenQ Medical Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
StShine Optical and BenQ Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StShine Optical and BenQ Medical
The main advantage of trading using opposite StShine Optical and BenQ Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StShine Optical position performs unexpectedly, BenQ Medical 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 BenQ Medical will offset losses from the drop in BenQ Medical's long position.The idea behind StShine Optical Co and BenQ Medical Technology 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 CEOs Directory module to screen CEOs from public companies around the world.
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