Correlation Between Orient Pharma and BenQ Medical
Can any of the company-specific risk be diversified away by investing in both Orient Pharma 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 Orient Pharma and BenQ Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Pharma Co and BenQ Medical Technology, you can compare the effects of market volatilities on Orient Pharma 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 Orient Pharma with a short position of BenQ Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Pharma and BenQ Medical.
Diversification Opportunities for Orient Pharma and BenQ Medical
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Orient and BenQ is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Orient Pharma Co 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 Orient Pharma 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 Orient Pharma Co 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 Orient Pharma i.e., Orient Pharma and BenQ Medical go up and down completely randomly.
Pair Corralation between Orient Pharma and BenQ Medical
Assuming the 90 days trading horizon Orient Pharma Co is expected to generate 4.43 times more return on investment than BenQ Medical. However, Orient Pharma is 4.43 times more volatile than BenQ Medical Technology. It trades about 0.15 of its potential returns per unit of risk. BenQ Medical Technology is currently generating about -0.02 per unit of risk. If you would invest 2,605 in Orient Pharma Co on September 12, 2024 and sell it today you would earn a total of 1,090 from holding Orient Pharma Co or generate 41.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Pharma Co vs. BenQ Medical Technology
Performance |
| Timeline |
| Orient Pharma |
| BenQ Medical Technology |
Orient Pharma and BenQ Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Pharma and BenQ Medical
The main advantage of trading using opposite Orient Pharma and BenQ Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Pharma 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.| Orient Pharma vs. Asustek Computer | Orient Pharma vs. Arima Communications Corp | Orient Pharma vs. Wonderful Hi Tech Co | Orient Pharma vs. Dimension Computer Technology |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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