Correlation Between BenQ Materials and Allis Electric
Can any of the company-specific risk be diversified away by investing in both BenQ Materials and Allis Electric 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 Materials and Allis Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BenQ Materials Corp and Allis Electric Co, you can compare the effects of market volatilities on BenQ Materials and Allis Electric 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 Materials with a short position of Allis Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of BenQ Materials and Allis Electric.
Diversification Opportunities for BenQ Materials and Allis Electric
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BenQ and Allis is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding BenQ Materials Corp and Allis Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allis Electric and BenQ Materials 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 Materials Corp are associated (or correlated) with Allis Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allis Electric has no effect on the direction of BenQ Materials i.e., BenQ Materials and Allis Electric go up and down completely randomly.
Pair Corralation between BenQ Materials and Allis Electric
Assuming the 90 days trading horizon BenQ Materials Corp is expected to generate 0.79 times more return on investment than Allis Electric. However, BenQ Materials Corp is 1.27 times less risky than Allis Electric. It trades about 0.06 of its potential returns per unit of risk. Allis Electric Co is currently generating about -0.07 per unit of risk. If you would invest 3,055 in BenQ Materials Corp on September 12, 2024 and sell it today you would earn a total of 180.00 from holding BenQ Materials Corp or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BenQ Materials Corp vs. Allis Electric Co
Performance |
| Timeline |
| BenQ Materials Corp |
| Allis Electric |
BenQ Materials and Allis Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BenQ Materials and Allis Electric
The main advantage of trading using opposite BenQ Materials and Allis Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BenQ Materials position performs unexpectedly, Allis Electric 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 Allis Electric will offset losses from the drop in Allis Electric's long position.| BenQ Materials vs. Gigastorage Corp | BenQ Materials vs. Darfon Electronics Corp | BenQ Materials vs. Walton Advanced Engineering | BenQ Materials vs. Pan International Industrial Corp |
| Allis Electric vs. Chung Hsin Electric Machinery | Allis Electric vs. Fortune Electric Co | Allis Electric vs. TECO Electric Machinery | Allis Electric vs. Basso Industry Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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