Correlation Between Evergreen Marine and BenQ Medical
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine 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 Evergreen Marine and BenQ Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evergreen Marine Corp and BenQ Medical Technology, you can compare the effects of market volatilities on Evergreen Marine 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 Evergreen Marine with a short position of BenQ Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and BenQ Medical.
Diversification Opportunities for Evergreen Marine and BenQ Medical
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Evergreen and BenQ is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp 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 Evergreen Marine 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 Evergreen Marine Corp 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 Evergreen Marine i.e., Evergreen Marine and BenQ Medical go up and down completely randomly.
Pair Corralation between Evergreen Marine and BenQ Medical
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 1.52 times more return on investment than BenQ Medical. However, Evergreen Marine is 1.52 times more volatile than BenQ Medical Technology. It trades about 0.09 of its potential returns per unit of risk. BenQ Medical Technology is currently generating about -0.04 per unit of risk. If you would invest 8,500 in Evergreen Marine Corp on September 3, 2024 and sell it today you would earn a total of 13,200 from holding Evergreen Marine Corp or generate 155.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. BenQ Medical Technology
Performance |
| Timeline |
| Evergreen Marine Corp |
| BenQ Medical Technology |
Evergreen Marine and BenQ Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and BenQ Medical
The main advantage of trading using opposite Evergreen Marine and BenQ Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine 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.| Evergreen Marine vs. Yang Ming Marine | Evergreen Marine vs. Wan Hai Lines | Evergreen Marine vs. Eva Airways Corp | Evergreen Marine vs. China Airlines |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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