Correlation Between Evergreen Steel and Camellia Metal
Can any of the company-specific risk be diversified away by investing in both Evergreen Steel and Camellia Metal 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 Evergreen Steel and Camellia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evergreen Steel Corp and Camellia Metal Co, you can compare the effects of market volatilities on Evergreen Steel and Camellia Metal 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 Evergreen Steel with a short position of Camellia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Steel and Camellia Metal.
Diversification Opportunities for Evergreen Steel and Camellia Metal
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evergreen and Camellia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Steel Corp and Camellia Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Metal and Evergreen Steel 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 Evergreen Steel Corp are associated (or correlated) with Camellia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Metal has no effect on the direction of Evergreen Steel i.e., Evergreen Steel and Camellia Metal go up and down completely randomly.
Pair Corralation between Evergreen Steel and Camellia Metal
Assuming the 90 days trading horizon Evergreen Steel Corp is expected to generate 1.4 times more return on investment than Camellia Metal. However, Evergreen Steel is 1.4 times more volatile than Camellia Metal Co. It trades about 0.08 of its potential returns per unit of risk. Camellia Metal Co is currently generating about 0.0 per unit of risk. If you would invest 5,170 in Evergreen Steel Corp on August 30, 2024 and sell it today you would earn a total of 4,880 from holding Evergreen Steel Corp or generate 94.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Steel Corp vs. Camellia Metal Co
Performance |
| Timeline |
| Evergreen Steel Corp |
| Camellia Metal |
Evergreen Steel and Camellia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Steel and Camellia Metal
The main advantage of trading using opposite Evergreen Steel and Camellia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Steel position performs unexpectedly, Camellia Metal 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 Camellia Metal will offset losses from the drop in Camellia Metal's long position.| Evergreen Steel vs. Catcher Technology Co | Evergreen Steel vs. Solar Applied Materials | Evergreen Steel vs. Shin Zu Shing | Evergreen Steel vs. China Metal Products |
| Camellia Metal vs. Catcher Technology Co | Camellia Metal vs. Solar Applied Materials | Camellia Metal vs. Shin Zu Shing | Camellia Metal vs. China Metal Products |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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