Correlation Between Evergreen Marine and Yang Ming
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Yang Ming 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 Yang Ming 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 Yang Ming Marine, you can compare the effects of market volatilities on Evergreen Marine and Yang Ming 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 Yang Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Yang Ming.
Diversification Opportunities for Evergreen Marine and Yang Ming
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Evergreen and Yang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Yang Ming Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yang Ming Marine 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 Yang Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yang Ming Marine has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Yang Ming go up and down completely randomly.
Pair Corralation between Evergreen Marine and Yang Ming
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 1.01 times more return on investment than Yang Ming. However, Evergreen Marine is 1.01 times more volatile than Yang Ming Marine. It trades about -0.26 of its potential returns per unit of risk. Yang Ming Marine is currently generating about -0.27 per unit of risk. If you would invest 22,950 in Evergreen Marine Corp on October 20, 2024 and sell it today you would lose (2,700) from holding Evergreen Marine Corp or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Yang Ming Marine
Performance |
| Timeline |
| Evergreen Marine Corp |
| Yang Ming Marine |
Evergreen Marine and Yang Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Yang Ming
The main advantage of trading using opposite Evergreen Marine and Yang Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Yang Ming 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 Yang Ming will offset losses from the drop in Yang Ming'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 |
| Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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