Correlation Between Evergreen Marine and Feng Ching
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Feng Ching 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 Feng Ching 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 Feng Ching Metal, you can compare the effects of market volatilities on Evergreen Marine and Feng Ching 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 Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Feng Ching.
Diversification Opportunities for Evergreen Marine and Feng Ching
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Evergreen and Feng is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal 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 Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Feng Ching go up and down completely randomly.
Pair Corralation between Evergreen Marine and Feng Ching
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 0.98 times more return on investment than Feng Ching. However, Evergreen Marine Corp is 1.02 times less risky than Feng Ching. It trades about 0.35 of its potential returns per unit of risk. Feng Ching Metal is currently generating about -0.07 per unit of risk. If you would invest 20,600 in Evergreen Marine Corp on August 27, 2024 and sell it today you would earn a total of 3,000 from holding Evergreen Marine Corp or generate 14.56% 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. Feng Ching Metal
Performance |
| Timeline |
| Evergreen Marine Corp |
| Feng Ching Metal |
Evergreen Marine and Feng Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Feng Ching
The main advantage of trading using opposite Evergreen Marine and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Feng Ching 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 Feng Ching will offset losses from the drop in Feng Ching's long position.| Evergreen Marine vs. Sunny Friend Environmental | Evergreen Marine vs. TTET Union Corp | Evergreen Marine vs. ECOVE Environment Corp | Evergreen Marine vs. Yulon Finance Corp |
| Feng Ching vs. Walsin Lihwa Corp | Feng Ching vs. Ta Ya Electric | Feng Ching vs. Hiwin Mikrosystem Corp | Feng Ching vs. Amtran Technology 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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