Correlation Between BES Engineering and Chun Yu
Can any of the company-specific risk be diversified away by investing in both BES Engineering and Chun Yu 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 BES Engineering and Chun Yu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BES Engineering Co and Chun Yu Works, you can compare the effects of market volatilities on BES Engineering and Chun Yu 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 BES Engineering with a short position of Chun Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of BES Engineering and Chun Yu.
Diversification Opportunities for BES Engineering and Chun Yu
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BES and Chun is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BES Engineering Co and Chun Yu Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chun Yu Works and BES Engineering 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 BES Engineering Co are associated (or correlated) with Chun Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chun Yu Works has no effect on the direction of BES Engineering i.e., BES Engineering and Chun Yu go up and down completely randomly.
Pair Corralation between BES Engineering and Chun Yu
Assuming the 90 days trading horizon BES Engineering Co is expected to generate 1.07 times more return on investment than Chun Yu. However, BES Engineering is 1.07 times more volatile than Chun Yu Works. It trades about 0.1 of its potential returns per unit of risk. Chun Yu Works is currently generating about 0.09 per unit of risk. If you would invest 1,085 in BES Engineering Co on August 31, 2024 and sell it today you would earn a total of 40.00 from holding BES Engineering Co or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BES Engineering Co vs. Chun Yu Works
Performance |
| Timeline |
| BES Engineering |
| Chun Yu Works |
BES Engineering and Chun Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BES Engineering and Chun Yu
The main advantage of trading using opposite BES Engineering and Chun Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BES Engineering position performs unexpectedly, Chun Yu 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 Chun Yu will offset losses from the drop in Chun Yu's long position.| BES Engineering vs. Hung Sheng Construction | BES Engineering vs. Taiwan Glass Ind | BES Engineering vs. China Petrochemical Development | BES Engineering vs. Taiwan Tea Corp |
| Chun Yu vs. BES Engineering Co | Chun Yu vs. Continental Holdings Corp | Chun Yu vs. Kee Tai Properties | Chun Yu vs. Hung Sheng Construction |
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 Stocks Directory module to find actively traded stocks across global markets.
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