Correlation Between Evergreen Marine and Easywell Biomedicals
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Easywell Biomedicals 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 Easywell Biomedicals 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 Easywell Biomedicals, you can compare the effects of market volatilities on Evergreen Marine and Easywell Biomedicals 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 Easywell Biomedicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Easywell Biomedicals.
Diversification Opportunities for Evergreen Marine and Easywell Biomedicals
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Evergreen and Easywell is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Easywell Biomedicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easywell Biomedicals 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 Easywell Biomedicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easywell Biomedicals has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Easywell Biomedicals go up and down completely randomly.
Pair Corralation between Evergreen Marine and Easywell Biomedicals
Assuming the 90 days trading horizon Evergreen Marine is expected to generate 1.18 times less return on investment than Easywell Biomedicals. But when comparing it to its historical volatility, Evergreen Marine Corp is 1.5 times less risky than Easywell Biomedicals. It trades about 0.17 of its potential returns per unit of risk. Easywell Biomedicals is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,160 in Easywell Biomedicals on December 1, 2024 and sell it today you would earn a total of 460.00 from holding Easywell Biomedicals or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Easywell Biomedicals
Performance |
| Timeline |
| Evergreen Marine Corp |
| Easywell Biomedicals |
Evergreen Marine and Easywell Biomedicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Easywell Biomedicals
The main advantage of trading using opposite Evergreen Marine and Easywell Biomedicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Easywell Biomedicals 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 Easywell Biomedicals will offset losses from the drop in Easywell Biomedicals' 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 |
| Easywell Biomedicals vs. China Airlines | Easywell Biomedicals vs. U Media Communications | Easywell Biomedicals vs. Song Shang Electronics | Easywell Biomedicals vs. Chicony Electronics Co |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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