Correlation Between Evergreen Marine and Yung Chi
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Yung Chi 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 Yung Chi 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 Yung Chi Paint, you can compare the effects of market volatilities on Evergreen Marine and Yung Chi 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 Yung Chi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Yung Chi.
Diversification Opportunities for Evergreen Marine and Yung Chi
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evergreen and Yung is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Yung Chi Paint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yung Chi Paint 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 Yung Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yung Chi Paint has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Yung Chi go up and down completely randomly.
Pair Corralation between Evergreen Marine and Yung Chi
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 3.43 times more return on investment than Yung Chi. However, Evergreen Marine is 3.43 times more volatile than Yung Chi Paint. It trades about 0.09 of its potential returns per unit of risk. Yung Chi Paint is currently generating about 0.04 per unit of risk. If you would invest 8,500 in Evergreen Marine Corp on September 3, 2024 and sell it today you would earn a total of 13,200 from holding Evergreen Marine Corp or generate 155.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Yung Chi Paint
Performance |
| Timeline |
| Evergreen Marine Corp |
| Yung Chi Paint |
Evergreen Marine and Yung Chi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Yung Chi
The main advantage of trading using opposite Evergreen Marine and Yung Chi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Yung Chi 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 Yung Chi will offset losses from the drop in Yung Chi's long position.| Evergreen Marine vs. Yang Ming Marine | Evergreen Marine vs. Wan Hai Lines | Evergreen Marine vs. Eva Airways Corp | Evergreen Marine vs. China Airlines |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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