Correlation Between Evergreen Marine and Sincere Navigation
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Sincere Navigation 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 Sincere Navigation 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 Sincere Navigation Corp, you can compare the effects of market volatilities on Evergreen Marine and Sincere Navigation 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 Sincere Navigation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Sincere Navigation.
Diversification Opportunities for Evergreen Marine and Sincere Navigation
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evergreen and Sincere is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Sincere Navigation Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sincere Navigation Corp 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 Sincere Navigation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sincere Navigation Corp has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Sincere Navigation go up and down completely randomly.
Pair Corralation between Evergreen Marine and Sincere Navigation
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 1.1 times more return on investment than Sincere Navigation. However, Evergreen Marine is 1.1 times more volatile than Sincere Navigation Corp. It trades about 0.11 of its potential returns per unit of risk. Sincere Navigation Corp is currently generating about 0.03 per unit of risk. If you would invest 11,400 in Evergreen Marine Corp on September 23, 2024 and sell it today you would earn a total of 11,650 from holding Evergreen Marine Corp or generate 102.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Sincere Navigation Corp
Performance |
| Timeline |
| Evergreen Marine Corp |
| Sincere Navigation Corp |
Evergreen Marine and Sincere Navigation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Sincere Navigation
The main advantage of trading using opposite Evergreen Marine and Sincere Navigation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Sincere Navigation 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 Sincere Navigation will offset losses from the drop in Sincere Navigation'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 |
| Sincere Navigation vs. Yang Ming Marine | Sincere Navigation vs. Evergreen Marine Corp | Sincere Navigation vs. Eva Airways Corp | Sincere Navigation vs. U Ming Marine Transport |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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