Correlation Between BenQ Materials and Shih Kuen
Can any of the company-specific risk be diversified away by investing in both BenQ Materials and Shih Kuen 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 Shih Kuen 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 Shih Kuen Plastics, you can compare the effects of market volatilities on BenQ Materials and Shih Kuen 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 Shih Kuen. Check out your portfolio center. Please also check ongoing floating volatility patterns of BenQ Materials and Shih Kuen.
Diversification Opportunities for BenQ Materials and Shih Kuen
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BenQ and Shih is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BenQ Materials Corp and Shih Kuen Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shih Kuen Plastics 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 Shih Kuen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shih Kuen Plastics has no effect on the direction of BenQ Materials i.e., BenQ Materials and Shih Kuen go up and down completely randomly.
Pair Corralation between BenQ Materials and Shih Kuen
Assuming the 90 days trading horizon BenQ Materials Corp is expected to generate 1.27 times more return on investment than Shih Kuen. However, BenQ Materials is 1.27 times more volatile than Shih Kuen Plastics. It trades about 0.0 of its potential returns per unit of risk. Shih Kuen Plastics is currently generating about -0.05 per unit of risk. If you would invest 3,300 in BenQ Materials Corp on September 3, 2024 and sell it today you would lose (45.00) from holding BenQ Materials Corp or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BenQ Materials Corp vs. Shih Kuen Plastics
Performance |
| Timeline |
| BenQ Materials Corp |
| Shih Kuen Plastics |
BenQ Materials and Shih Kuen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BenQ Materials and Shih Kuen
The main advantage of trading using opposite BenQ Materials and Shih Kuen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BenQ Materials position performs unexpectedly, Shih Kuen 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 Shih Kuen will offset losses from the drop in Shih Kuen's long position.| BenQ Materials vs. Taiwan Semiconductor Manufacturing | BenQ Materials vs. Yang Ming Marine | BenQ Materials vs. ASE Industrial Holding | BenQ Materials vs. AU Optronics |
| Shih Kuen vs. Cheng Shin Rubber | Shih Kuen vs. Nankang Rubber Tire | Shih Kuen vs. Asia Polymer Corp | Shih Kuen vs. Ocean Plastics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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