Correlation Between Evergreen Steel and Catcher Technology
Can any of the company-specific risk be diversified away by investing in both Evergreen Steel and Catcher Technology 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 Catcher Technology 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 Catcher Technology Co, you can compare the effects of market volatilities on Evergreen Steel and Catcher Technology 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 Catcher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Steel and Catcher Technology.
Diversification Opportunities for Evergreen Steel and Catcher Technology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evergreen and Catcher is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Steel Corp and Catcher Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catcher Technology 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 Catcher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catcher Technology has no effect on the direction of Evergreen Steel i.e., Evergreen Steel and Catcher Technology go up and down completely randomly.
Pair Corralation between Evergreen Steel and Catcher Technology
Assuming the 90 days trading horizon Evergreen Steel Corp is expected to generate 0.92 times more return on investment than Catcher Technology. However, Evergreen Steel Corp is 1.08 times less risky than Catcher Technology. It trades about -0.03 of its potential returns per unit of risk. Catcher Technology Co is currently generating about -0.41 per unit of risk. If you would invest 10,450 in Evergreen Steel Corp on August 27, 2024 and sell it today you would lose (150.00) from holding Evergreen Steel Corp or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Steel Corp vs. Catcher Technology Co
Performance |
| Timeline |
| Evergreen Steel Corp |
| Catcher Technology |
Evergreen Steel and Catcher Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Steel and Catcher Technology
The main advantage of trading using opposite Evergreen Steel and Catcher Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Steel position performs unexpectedly, Catcher Technology 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 Catcher Technology will offset losses from the drop in Catcher Technology's long position.| Evergreen Steel vs. Yang Ming Marine | Evergreen Steel vs. Wan Hai Lines | Evergreen Steel vs. Hsin Kuang Steel | Evergreen Steel vs. Evergreen Marine Corp |
| Catcher Technology vs. Novatek Microelectronics Corp | Catcher Technology vs. Quanta Computer | Catcher Technology vs. United Microelectronics |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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