Correlation Between Catcher Technology and Evergreen Steel
Can any of the company-specific risk be diversified away by investing in both Catcher Technology and Evergreen Steel 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 Catcher Technology and Evergreen Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catcher Technology Co and Evergreen Steel Corp, you can compare the effects of market volatilities on Catcher Technology and Evergreen Steel 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 Catcher Technology with a short position of Evergreen Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catcher Technology and Evergreen Steel.
Diversification Opportunities for Catcher Technology and Evergreen Steel
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catcher and Evergreen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Catcher Technology Co and Evergreen Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen Steel Corp and Catcher Technology 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 Catcher Technology Co are associated (or correlated) with Evergreen Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen Steel Corp has no effect on the direction of Catcher Technology i.e., Catcher Technology and Evergreen Steel go up and down completely randomly.
Pair Corralation between Catcher Technology and Evergreen Steel
Assuming the 90 days trading horizon Catcher Technology is expected to generate 6.93 times less return on investment than Evergreen Steel. But when comparing it to its historical volatility, Catcher Technology Co is 1.45 times less risky than Evergreen Steel. It trades about 0.02 of its potential returns per unit of risk. Evergreen Steel Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,370 in Evergreen Steel Corp on August 27, 2024 and sell it today you would earn a total of 4,930 from holding Evergreen Steel Corp or generate 91.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catcher Technology Co vs. Evergreen Steel Corp
Performance |
| Timeline |
| Catcher Technology |
| Evergreen Steel Corp |
Catcher Technology and Evergreen Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catcher Technology and Evergreen Steel
The main advantage of trading using opposite Catcher Technology and Evergreen Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catcher Technology position performs unexpectedly, Evergreen Steel 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 Evergreen Steel will offset losses from the drop in Evergreen Steel's long position.| Catcher Technology vs. Novatek Microelectronics Corp | Catcher Technology vs. Quanta Computer | Catcher Technology vs. United Microelectronics |
| Evergreen Steel vs. Yang Ming Marine | Evergreen Steel vs. Wan Hai Lines | Evergreen Steel vs. Hsin Kuang Steel | Evergreen Steel vs. Evergreen Marine 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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