Correlation Between BenQ Medical and HIM International
Can any of the company-specific risk be diversified away by investing in both BenQ Medical and HIM International 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 HIM International 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 HIM International Music, you can compare the effects of market volatilities on BenQ Medical and HIM International 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 HIM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BenQ Medical and HIM International.
Diversification Opportunities for BenQ Medical and HIM International
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BenQ and HIM is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding BenQ Medical Technology and HIM International Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIM International Music 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 HIM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIM International Music has no effect on the direction of BenQ Medical i.e., BenQ Medical and HIM International go up and down completely randomly.
Pair Corralation between BenQ Medical and HIM International
Assuming the 90 days trading horizon BenQ Medical Technology is expected to generate 1.01 times more return on investment than HIM International. However, BenQ Medical is 1.01 times more volatile than HIM International Music. It trades about 0.64 of its potential returns per unit of risk. HIM International Music is currently generating about 0.28 per unit of risk. If you would invest 4,545 in BenQ Medical Technology on November 28, 2024 and sell it today you would earn a total of 475.00 from holding BenQ Medical Technology or generate 10.45% 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. HIM International Music
Performance |
| Timeline |
| BenQ Medical Technology |
| HIM International Music |
BenQ Medical and HIM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BenQ Medical and HIM International
The main advantage of trading using opposite BenQ Medical and HIM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BenQ Medical position performs unexpectedly, HIM International 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 HIM International will offset losses from the drop in HIM International's long position.| BenQ Medical vs. Mosa Industrial Corp | BenQ Medical vs. SS Healthcare Holding | BenQ Medical vs. Advanced Wireless Semiconductor | BenQ Medical vs. Formosa International Hotels |
| HIM International vs. Double Bond Chemical | HIM International vs. Asia Metal Industries | HIM International vs. Camellia Metal Co | HIM International vs. First Insurance Co |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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