Correlation Between Pacific Hospital and BenQ Medical
Can any of the company-specific risk be diversified away by investing in both Pacific Hospital 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 Pacific Hospital and BenQ Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Hospital Supply and BenQ Medical Technology, you can compare the effects of market volatilities on Pacific Hospital 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 Pacific Hospital with a short position of BenQ Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Hospital and BenQ Medical.
Diversification Opportunities for Pacific Hospital and BenQ Medical
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacific and BenQ is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Hospital Supply 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 Pacific Hospital 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 Pacific Hospital Supply 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 Pacific Hospital i.e., Pacific Hospital and BenQ Medical go up and down completely randomly.
Pair Corralation between Pacific Hospital and BenQ Medical
Assuming the 90 days trading horizon Pacific Hospital Supply is expected to generate 0.45 times more return on investment than BenQ Medical. However, Pacific Hospital Supply is 2.21 times less risky than BenQ Medical. It trades about 0.2 of its potential returns per unit of risk. BenQ Medical Technology is currently generating about -0.05 per unit of risk. If you would invest 8,910 in Pacific Hospital Supply on September 13, 2024 and sell it today you would earn a total of 230.00 from holding Pacific Hospital Supply or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Hospital Supply vs. BenQ Medical Technology
Performance |
| Timeline |
| Pacific Hospital Supply |
| BenQ Medical Technology |
Pacific Hospital and BenQ Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Hospital and BenQ Medical
The main advantage of trading using opposite Pacific Hospital and BenQ Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Hospital 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.| Pacific Hospital vs. Universal Vision Biotechnology | Pacific Hospital vs. Excelsior Medical Co | Pacific Hospital vs. Ruentex Development Co | Pacific Hospital vs. Symtek Automation Asia |
| BenQ Medical vs. Universal Vision Biotechnology | BenQ Medical vs. Excelsior Medical Co | BenQ Medical vs. Pacific Hospital Supply | BenQ Medical vs. Ruentex Development 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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