Correlation Between BenQ Medical and Yageo Corp
Can any of the company-specific risk be diversified away by investing in both BenQ Medical and Yageo Corp 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 BenQ Medical and Yageo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BenQ Medical Technology and Yageo Corp, you can compare the effects of market volatilities on BenQ Medical and Yageo Corp 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 BenQ Medical with a short position of Yageo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BenQ Medical and Yageo Corp.
Diversification Opportunities for BenQ Medical and Yageo Corp
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BenQ and Yageo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BenQ Medical Technology and Yageo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yageo Corp and BenQ Medical 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 BenQ Medical Technology are associated (or correlated) with Yageo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yageo Corp has no effect on the direction of BenQ Medical i.e., BenQ Medical and Yageo Corp go up and down completely randomly.
Pair Corralation between BenQ Medical and Yageo Corp
Assuming the 90 days trading horizon BenQ Medical Technology is expected to generate 0.66 times more return on investment than Yageo Corp. However, BenQ Medical Technology is 1.52 times less risky than Yageo Corp. It trades about -0.17 of its potential returns per unit of risk. Yageo Corp is currently generating about -0.11 per unit of risk. If you would invest 5,120 in BenQ Medical Technology on October 25, 2024 and sell it today you would lose (615.00) from holding BenQ Medical Technology or give up 12.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BenQ Medical Technology vs. Yageo Corp
Performance |
| Timeline |
| BenQ Medical Technology |
| Yageo Corp |
BenQ Medical and Yageo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BenQ Medical and Yageo Corp
The main advantage of trading using opposite BenQ Medical and Yageo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BenQ Medical position performs unexpectedly, Yageo Corp 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 Yageo Corp will offset losses from the drop in Yageo Corp's long position.| BenQ Medical vs. StShine Optical Co | BenQ Medical vs. Bioteque | BenQ Medical vs. United Orthopedic | BenQ Medical vs. TTY Biopharm Co |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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