Correlation Between BenQ Medical and Chi Sheng

Can any of the company-specific risk be diversified away by investing in both BenQ Medical and Chi Sheng 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 Medical and Chi Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BenQ Medical Technology and Chi Sheng Chemical, you can compare the effects of market volatilities on BenQ Medical and Chi Sheng 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 Medical with a short position of Chi Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of BenQ Medical and Chi Sheng.

Diversification Opportunities for BenQ Medical and Chi Sheng

-0.69

Correlation Coefficient

BenQ Medical  Chi Sheng

Excellent diversification

The 3 months correlation between BenQ and Chi is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding BenQ Medical Technology and Chi Sheng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Sheng Chemical and BenQ Medical 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 Medical Technology are associated (or correlated) with Chi Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Sheng Chemical has no effect on the direction of BenQ Medical i.e., BenQ Medical and Chi Sheng go up and down completely randomly.

Pair Corralation between BenQ Medical and Chi Sheng

Assuming the 90 days trading horizon BenQ Medical Technology is expected to under-perform the Chi Sheng. In addition to that, BenQ Medical is 1.62 times more volatile than Chi Sheng Chemical. It trades about -0.06 of its total potential returns per unit of risk. Chi Sheng Chemical is currently generating about 0.12 per unit of volatility. If you would invest  2,615  in Chi Sheng Chemical on September 5, 2024 and sell it today you would earn a total of  115.00  from holding Chi Sheng Chemical or generate 4.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BenQ Medical Technology  vs.  Chi Sheng Chemical

BenQ Medical Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BenQ Medical Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, BenQ Medical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Chi Sheng Chemical

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chi Sheng Chemical are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Chi Sheng is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BenQ Medical and Chi Sheng

The main advantage of trading using opposite BenQ Medical and Chi Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BenQ Medical position performs unexpectedly, Chi Sheng 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 Chi Sheng will offset losses from the drop in Chi Sheng's long position.

The idea behind BenQ Medical Technology and Chi Sheng Chemical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.