Correlation Between Tehmag Foods and Chinese Maritime
Can any of the company-specific risk be diversified away by investing in both Tehmag Foods and Chinese Maritime 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 Tehmag Foods and Chinese Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tehmag Foods and Chinese Maritime Transport, you can compare the effects of market volatilities on Tehmag Foods and Chinese Maritime 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 Tehmag Foods with a short position of Chinese Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tehmag Foods and Chinese Maritime.
Diversification Opportunities for Tehmag Foods and Chinese Maritime
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tehmag and Chinese is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tehmag Foods and Chinese Maritime Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Maritime Tra and Tehmag Foods 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 Tehmag Foods are associated (or correlated) with Chinese Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Maritime Tra has no effect on the direction of Tehmag Foods i.e., Tehmag Foods and Chinese Maritime go up and down completely randomly.
Pair Corralation between Tehmag Foods and Chinese Maritime
Assuming the 90 days trading horizon Tehmag Foods is expected to generate 0.33 times more return on investment than Chinese Maritime. However, Tehmag Foods is 2.99 times less risky than Chinese Maritime. It trades about 0.08 of its potential returns per unit of risk. Chinese Maritime Transport is currently generating about 0.02 per unit of risk. If you would invest 23,955 in Tehmag Foods on September 3, 2024 and sell it today you would earn a total of 6,245 from holding Tehmag Foods or generate 26.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tehmag Foods vs. Chinese Maritime Transport
Performance |
| Timeline |
| Tehmag Foods |
| Chinese Maritime Tra |
Tehmag Foods and Chinese Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tehmag Foods and Chinese Maritime
The main advantage of trading using opposite Tehmag Foods and Chinese Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tehmag Foods position performs unexpectedly, Chinese Maritime 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 Chinese Maritime will offset losses from the drop in Chinese Maritime's long position.| Tehmag Foods vs. Uni President Enterprises Corp | Tehmag Foods vs. Lien Hwa Industrial | Tehmag Foods vs. Great Wall Enterprise | Tehmag Foods vs. Standard Foods Corp |
| Chinese Maritime vs. Universal Microelectronics Co | Chinese Maritime vs. AVerMedia Technologies | Chinese Maritime vs. Symtek Automation Asia | Chinese Maritime vs. WiseChip Semiconductor |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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