Correlation Between Camellia Metal and China Airlines
Can any of the company-specific risk be diversified away by investing in both Camellia Metal and China Airlines 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 Camellia Metal and China Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camellia Metal Co and China Airlines, you can compare the effects of market volatilities on Camellia Metal and China Airlines 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 Camellia Metal with a short position of China Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Metal and China Airlines.
Diversification Opportunities for Camellia Metal and China Airlines
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Camellia and China is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Metal Co and China Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Airlines and Camellia Metal 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 Camellia Metal Co are associated (or correlated) with China Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Airlines has no effect on the direction of Camellia Metal i.e., Camellia Metal and China Airlines go up and down completely randomly.
Pair Corralation between Camellia Metal and China Airlines
Assuming the 90 days trading horizon Camellia Metal Co is expected to under-perform the China Airlines. In addition to that, Camellia Metal is 2.27 times more volatile than China Airlines. It trades about -0.15 of its total potential returns per unit of risk. China Airlines is currently generating about 0.45 per unit of volatility. If you would invest 2,250 in China Airlines on September 2, 2024 and sell it today you would earn a total of 240.00 from holding China Airlines or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camellia Metal Co vs. China Airlines
Performance |
| Timeline |
| Camellia Metal |
| China Airlines |
Camellia Metal and China Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Metal and China Airlines
The main advantage of trading using opposite Camellia Metal and China Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Metal position performs unexpectedly, China Airlines 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 China Airlines will offset losses from the drop in China Airlines' long position.| Camellia Metal vs. Yang Ming Marine | Camellia Metal vs. Wan Hai Lines | Camellia Metal vs. Hsin Kuang Steel | Camellia Metal vs. Evergreen Marine Corp |
| China Airlines vs. Eva Airways Corp | China Airlines vs. Evergreen Marine Corp | China Airlines vs. Yang Ming Marine | China Airlines vs. China Steel 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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