Correlation Between Chun Yuan and Chinese Maritime
Can any of the company-specific risk be diversified away by investing in both Chun Yuan 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 Chun Yuan and Chinese Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chun Yuan Steel and Chinese Maritime Transport, you can compare the effects of market volatilities on Chun Yuan 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 Chun Yuan with a short position of Chinese Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chun Yuan and Chinese Maritime.
Diversification Opportunities for Chun Yuan and Chinese Maritime
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chun and Chinese is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Chun Yuan Steel 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 Chun Yuan 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 Chun Yuan Steel 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 Chun Yuan i.e., Chun Yuan and Chinese Maritime go up and down completely randomly.
Pair Corralation between Chun Yuan and Chinese Maritime
Assuming the 90 days trading horizon Chun Yuan Steel is expected to generate 0.89 times more return on investment than Chinese Maritime. However, Chun Yuan Steel is 1.12 times less risky than Chinese Maritime. It trades about 0.01 of its potential returns per unit of risk. Chinese Maritime Transport is currently generating about -0.04 per unit of risk. If you would invest 1,770 in Chun Yuan Steel on October 22, 2024 and sell it today you would earn a total of 10.00 from holding Chun Yuan Steel or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chun Yuan Steel vs. Chinese Maritime Transport
Performance |
| Timeline |
| Chun Yuan Steel |
| Chinese Maritime Tra |
Chun Yuan and Chinese Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chun Yuan and Chinese Maritime
The main advantage of trading using opposite Chun Yuan and Chinese Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chun Yuan 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.| Chun Yuan vs. Hsin Kuang Steel | Chun Yuan vs. Chung Hung Steel | Chun Yuan vs. China Steel Structure | Chun Yuan vs. Feng Hsin Steel |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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