Correlation Between Brighton Best and Strong H
Can any of the company-specific risk be diversified away by investing in both Brighton Best and Strong H 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 Brighton Best and Strong H into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brighton Best International Taiwan and Strong H Machinery, you can compare the effects of market volatilities on Brighton Best and Strong H 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 Brighton Best with a short position of Strong H. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brighton Best and Strong H.
Diversification Opportunities for Brighton Best and Strong H
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brighton and Strong is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Brighton Best International Ta and Strong H Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strong H Machinery and Brighton Best 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 Brighton Best International Taiwan are associated (or correlated) with Strong H. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strong H Machinery has no effect on the direction of Brighton Best i.e., Brighton Best and Strong H go up and down completely randomly.
Pair Corralation between Brighton Best and Strong H
Assuming the 90 days trading horizon Brighton Best International Taiwan is expected to generate 0.92 times more return on investment than Strong H. However, Brighton Best International Taiwan is 1.09 times less risky than Strong H. It trades about 0.05 of its potential returns per unit of risk. Strong H Machinery is currently generating about -0.23 per unit of risk. If you would invest 3,395 in Brighton Best International Taiwan on October 30, 2024 and sell it today you would earn a total of 20.00 from holding Brighton Best International Taiwan or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brighton Best International Ta vs. Strong H Machinery
Performance |
| Timeline |
| Brighton Best Intern |
| Strong H Machinery |
Brighton Best and Strong H Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brighton Best and Strong H
The main advantage of trading using opposite Brighton Best and Strong H positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brighton Best position performs unexpectedly, Strong H 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 Strong H will offset losses from the drop in Strong H's long position.| Brighton Best vs. Ta Chen Stainless | Brighton Best vs. Chung Hung Steel | Brighton Best vs. U Ming Marine Transport | Brighton Best vs. Century Iron And |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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