Correlation Between Carnival Industrial and Yi Jinn
Can any of the company-specific risk be diversified away by investing in both Carnival Industrial and Yi Jinn 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 Carnival Industrial and Yi Jinn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnival Industrial Corp and Yi Jinn Industrial, you can compare the effects of market volatilities on Carnival Industrial and Yi Jinn 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 Carnival Industrial with a short position of Yi Jinn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival Industrial and Yi Jinn.
Diversification Opportunities for Carnival Industrial and Yi Jinn
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carnival and 1457 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Carnival Industrial Corp and Yi Jinn Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yi Jinn Industrial and Carnival Industrial 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 Carnival Industrial Corp are associated (or correlated) with Yi Jinn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yi Jinn Industrial has no effect on the direction of Carnival Industrial i.e., Carnival Industrial and Yi Jinn go up and down completely randomly.
Pair Corralation between Carnival Industrial and Yi Jinn
Assuming the 90 days trading horizon Carnival Industrial Corp is expected to under-perform the Yi Jinn. But the stock apears to be less risky and, when comparing its historical volatility, Carnival Industrial Corp is 1.3 times less risky than Yi Jinn. The stock trades about -0.06 of its potential returns per unit of risk. The Yi Jinn Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,895 in Yi Jinn Industrial on September 4, 2024 and sell it today you would earn a total of 70.00 from holding Yi Jinn Industrial or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Carnival Industrial Corp vs. Yi Jinn Industrial
Performance |
| Timeline |
| Carnival Industrial Corp |
| Yi Jinn Industrial |
Carnival Industrial and Yi Jinn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnival Industrial and Yi Jinn
The main advantage of trading using opposite Carnival Industrial and Yi Jinn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival Industrial position performs unexpectedly, Yi Jinn 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 Yi Jinn will offset losses from the drop in Yi Jinn's long position.| Carnival Industrial vs. Tainan Spinning Co | Carnival Industrial vs. Chia Her Industrial | Carnival Industrial vs. WiseChip Semiconductor | Carnival Industrial vs. Novatek Microelectronics Corp |
| Yi Jinn vs. Tainan Spinning Co | Yi Jinn vs. Chia Her Industrial | Yi Jinn vs. WiseChip Semiconductor | Yi Jinn vs. Novatek Microelectronics Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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