Correlation Between Evergreen Marine and Edom Technology
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Edom Technology 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 Edom Technology 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 Edom Technology Co, you can compare the effects of market volatilities on Evergreen Marine and Edom Technology 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 Edom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Edom Technology.
Diversification Opportunities for Evergreen Marine and Edom Technology
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evergreen and Edom is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Edom Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edom Technology 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 Edom Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edom Technology has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Edom Technology go up and down completely randomly.
Pair Corralation between Evergreen Marine and Edom Technology
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 0.93 times more return on investment than Edom Technology. However, Evergreen Marine Corp is 1.08 times less risky than Edom Technology. It trades about 0.11 of its potential returns per unit of risk. Edom Technology Co is currently generating about 0.04 per unit of risk. If you would invest 10,500 in Evergreen Marine Corp on September 12, 2024 and sell it today you would earn a total of 12,600 from holding Evergreen Marine Corp or generate 120.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Edom Technology Co
Performance |
| Timeline |
| Evergreen Marine Corp |
| Edom Technology |
Evergreen Marine and Edom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Edom Technology
The main advantage of trading using opposite Evergreen Marine and Edom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Edom Technology 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 Edom Technology will offset losses from the drop in Edom Technology'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 |
| Edom Technology vs. Altek Corp | Edom Technology vs. ALi Corp | Edom Technology vs. Leader Electronics | Edom Technology vs. Spirox 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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