Correlation Between Evergreen Marine and Chia Ta
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Chia Ta 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 Chia Ta 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 Chia Ta World, you can compare the effects of market volatilities on Evergreen Marine and Chia Ta 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 Chia Ta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Chia Ta.
Diversification Opportunities for Evergreen Marine and Chia Ta
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evergreen and Chia is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Chia Ta World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chia Ta World 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 Chia Ta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chia Ta World has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Chia Ta go up and down completely randomly.
Pair Corralation between Evergreen Marine and Chia Ta
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 0.95 times more return on investment than Chia Ta. However, Evergreen Marine Corp is 1.05 times less risky than Chia Ta. It trades about 0.12 of its potential returns per unit of risk. Chia Ta World is currently generating about 0.08 per unit of risk. If you would invest 11,400 in Evergreen Marine Corp on August 24, 2024 and sell it today you would earn a total of 12,500 from holding Evergreen Marine Corp or generate 109.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Chia Ta World
Performance |
| Timeline |
| Evergreen Marine Corp |
| Chia Ta World |
Evergreen Marine and Chia Ta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Chia Ta
The main advantage of trading using opposite Evergreen Marine and Chia Ta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Chia Ta 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 Chia Ta will offset losses from the drop in Chia Ta's long position.| Evergreen Marine vs. Sunny Friend Environmental | Evergreen Marine vs. Taiwan Secom Co | Evergreen Marine vs. TTET Union Corp | Evergreen Marine vs. ECOVE Environment Corp |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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