Correlation Between BenQ Materials and Altek Corp

Can any of the company-specific risk be diversified away by investing in both BenQ Materials and Altek Corp 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 Altek Corp 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 Altek Corp, you can compare the effects of market volatilities on BenQ Materials and Altek Corp 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 Altek Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BenQ Materials and Altek Corp.

Diversification Opportunities for BenQ Materials and Altek Corp

-0.3

Correlation Coefficient

BenQ Materials  Altek Corp

Very good diversification

The 3 months correlation between BenQ and Altek is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BenQ Materials Corp and Altek Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altek Corp 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 Altek Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altek Corp has no effect on the direction of BenQ Materials i.e., BenQ Materials and Altek Corp go up and down completely randomly.

Pair Corralation between BenQ Materials and Altek Corp

Assuming the 90 days trading horizon BenQ Materials Corp is expected to under-perform the Altek Corp. But the stock apears to be less risky and, when comparing its historical volatility, BenQ Materials Corp is 2.69 times less risky than Altek Corp. The stock trades about -0.14 of its potential returns per unit of risk. The Altek Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4,020  in Altek Corp on December 27, 2024 and sell it today you would earn a total of  250.00  from holding Altek Corp or generate 6.22% return on investment over 90 days.

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

BenQ Materials Corp  vs.  Altek Corp

BenQ Materials Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days BenQ Materials Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Altek Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altek Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Altek Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BenQ Materials and Altek Corp

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

The idea behind BenQ Materials Corp and Altek Corp 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.