Correlation Between Evergreen Marine and Chi Hua
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Chi Hua 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 Marine and Chi Hua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evergreen Marine Corp and Chi Hua Fitness, you can compare the effects of market volatilities on Evergreen Marine and Chi Hua 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 Marine with a short position of Chi Hua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Chi Hua.
Diversification Opportunities for Evergreen Marine and Chi Hua
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Evergreen and Chi is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Chi Hua Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Hua Fitness and Evergreen Marine 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 Marine Corp are associated (or correlated) with Chi Hua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Hua Fitness has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Chi Hua go up and down completely randomly.
Pair Corralation between Evergreen Marine and Chi Hua
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 1.69 times more return on investment than Chi Hua. However, Evergreen Marine is 1.69 times more volatile than Chi Hua Fitness. It trades about 0.02 of its potential returns per unit of risk. Chi Hua Fitness is currently generating about -0.06 per unit of risk. If you would invest 21,050 in Evergreen Marine Corp on August 29, 2024 and sell it today you would earn a total of 350.00 from holding Evergreen Marine Corp or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Chi Hua Fitness
Performance |
| Timeline |
| Evergreen Marine Corp |
| Chi Hua Fitness |
Evergreen Marine and Chi Hua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Chi Hua
The main advantage of trading using opposite Evergreen Marine and Chi Hua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Chi Hua 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 Chi Hua will offset losses from the drop in Chi Hua's long position.| Evergreen Marine vs. Yulon Motor Co | Evergreen Marine vs. Far Eastern Department | Evergreen Marine vs. China Steel Corp | Evergreen Marine vs. Chang Hwa Commercial |
| Chi Hua vs. Feng Tay Enterprises | Chi Hua vs. Ruentex Materials Co | Chi Hua vs. Symtek Automation Asia | Chi Hua vs. CTCI 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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