Correlation Between BenQ Medical and Kenmec Mechanical
Can any of the company-specific risk be diversified away by investing in both BenQ Medical and Kenmec Mechanical 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 Kenmec Mechanical 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 Kenmec Mechanical Engineering, you can compare the effects of market volatilities on BenQ Medical and Kenmec Mechanical 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 Kenmec Mechanical. Check out your portfolio center. Please also check ongoing floating volatility patterns of BenQ Medical and Kenmec Mechanical.
Diversification Opportunities for BenQ Medical and Kenmec Mechanical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BenQ and Kenmec is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BenQ Medical Technology and Kenmec Mechanical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenmec Mechanical 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 Kenmec Mechanical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenmec Mechanical has no effect on the direction of BenQ Medical i.e., BenQ Medical and Kenmec Mechanical go up and down completely randomly.
Pair Corralation between BenQ Medical and Kenmec Mechanical
Assuming the 90 days trading horizon BenQ Medical Technology is expected to under-perform the Kenmec Mechanical. But the stock apears to be less risky and, when comparing its historical volatility, BenQ Medical Technology is 2.29 times less risky than Kenmec Mechanical. The stock trades about -0.02 of its potential returns per unit of risk. The Kenmec Mechanical Engineering is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,499 in Kenmec Mechanical Engineering on September 3, 2024 and sell it today you would earn a total of 6,021 from holding Kenmec Mechanical Engineering or generate 240.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BenQ Medical Technology vs. Kenmec Mechanical Engineering
Performance |
| Timeline |
| BenQ Medical Technology |
| Kenmec Mechanical |
BenQ Medical and Kenmec Mechanical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BenQ Medical and Kenmec Mechanical
The main advantage of trading using opposite BenQ Medical and Kenmec Mechanical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BenQ Medical position performs unexpectedly, Kenmec Mechanical 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 Kenmec Mechanical will offset losses from the drop in Kenmec Mechanical's long position.| BenQ Medical vs. StShine Optical Co | BenQ Medical vs. Bioteque | BenQ Medical vs. TTY Biopharm Co | BenQ Medical vs. Apex Biotechnology Corp |
| Kenmec Mechanical vs. Highlight Tech | Kenmec Mechanical vs. WiseChip Semiconductor | Kenmec Mechanical vs. Novatek Microelectronics Corp | Kenmec Mechanical vs. Leader Electronics |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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