Correlation Between Macronix International and BenQ Materials
Can any of the company-specific risk be diversified away by investing in both Macronix International and BenQ Materials 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 Macronix International and BenQ Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macronix International Co and BenQ Materials Corp, you can compare the effects of market volatilities on Macronix International and BenQ Materials 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 Macronix International with a short position of BenQ Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macronix International and BenQ Materials.
Diversification Opportunities for Macronix International and BenQ Materials
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Macronix and BenQ is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Macronix International Co and BenQ Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BenQ Materials Corp and Macronix International 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 Macronix International Co are associated (or correlated) with BenQ Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BenQ Materials Corp has no effect on the direction of Macronix International i.e., Macronix International and BenQ Materials go up and down completely randomly.
Pair Corralation between Macronix International and BenQ Materials
Assuming the 90 days trading horizon Macronix International Co is expected to under-perform the BenQ Materials. But the stock apears to be less risky and, when comparing its historical volatility, Macronix International Co is 1.09 times less risky than BenQ Materials. The stock trades about -0.06 of its potential returns per unit of risk. The BenQ Materials Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,295 in BenQ Materials Corp on September 2, 2024 and sell it today you would earn a total of 25.00 from holding BenQ Materials Corp or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macronix International Co vs. BenQ Materials Corp
Performance |
| Timeline |
| Macronix International |
| BenQ Materials Corp |
Macronix International and BenQ Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macronix International and BenQ Materials
The main advantage of trading using opposite Macronix International and BenQ Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macronix International position performs unexpectedly, BenQ Materials 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 Materials will offset losses from the drop in BenQ Materials' long position.| Macronix International vs. Winbond Electronics Corp | Macronix International vs. United Microelectronics | Macronix International vs. Mosel Vitelic | Macronix International vs. VIA Technologies |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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