Correlation Between StShine Optical and Chinese Maritime
Can any of the company-specific risk be diversified away by investing in both StShine Optical 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 StShine Optical and Chinese Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StShine Optical Co and Chinese Maritime Transport, you can compare the effects of market volatilities on StShine Optical 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 StShine Optical with a short position of Chinese Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of StShine Optical and Chinese Maritime.
Diversification Opportunities for StShine Optical and Chinese Maritime
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between StShine and Chinese is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding StShine Optical Co 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 StShine Optical 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 StShine Optical Co 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 StShine Optical i.e., StShine Optical and Chinese Maritime go up and down completely randomly.
Pair Corralation between StShine Optical and Chinese Maritime
Assuming the 90 days trading horizon StShine Optical is expected to generate 18.41 times less return on investment than Chinese Maritime. But when comparing it to its historical volatility, StShine Optical Co is 2.79 times less risky than Chinese Maritime. It trades about 0.07 of its potential returns per unit of risk. Chinese Maritime Transport is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 3,885 in Chinese Maritime Transport on November 28, 2024 and sell it today you would earn a total of 865.00 from holding Chinese Maritime Transport or generate 22.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
StShine Optical Co vs. Chinese Maritime Transport
Performance |
| Timeline |
| StShine Optical |
| Chinese Maritime Tra |
StShine Optical and Chinese Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StShine Optical and Chinese Maritime
The main advantage of trading using opposite StShine Optical and Chinese Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StShine Optical 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.| StShine Optical vs. Holiday Entertainment Co | StShine Optical vs. C Media Electronics | StShine Optical vs. Sports Gear Co | StShine Optical vs. Weltrend Semiconductor |
| Chinese Maritime vs. U Ming Marine Transport | Chinese Maritime vs. Sincere Navigation Corp | Chinese Maritime vs. Taiwan Navigation Co | Chinese Maritime vs. Huaku Development Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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