Correlation Between Evergreen Marine and Advanced Analog
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Advanced Analog 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 Advanced Analog 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 Advanced Analog Technology, you can compare the effects of market volatilities on Evergreen Marine and Advanced Analog 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 Advanced Analog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Advanced Analog.
Diversification Opportunities for Evergreen Marine and Advanced Analog
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evergreen and Advanced is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Advanced Analog Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Analog Tech 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 Advanced Analog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Analog Tech has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Advanced Analog go up and down completely randomly.
Pair Corralation between Evergreen Marine and Advanced Analog
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 1.48 times more return on investment than Advanced Analog. However, Evergreen Marine is 1.48 times more volatile than Advanced Analog Technology. It trades about 0.07 of its potential returns per unit of risk. Advanced Analog Technology is currently generating about -0.17 per unit of risk. If you would invest 20,100 in Evergreen Marine Corp on August 30, 2024 and sell it today you would earn a total of 1,300 from holding Evergreen Marine Corp or generate 6.47% 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. Advanced Analog Technology
Performance |
| Timeline |
| Evergreen Marine Corp |
| Advanced Analog Tech |
Evergreen Marine and Advanced Analog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Advanced Analog
The main advantage of trading using opposite Evergreen Marine and Advanced Analog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Advanced Analog 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 Advanced Analog will offset losses from the drop in Advanced Analog's long position.| Evergreen Marine vs. Yulon Motor Co | Evergreen Marine vs. Far Eastern Department | Evergreen Marine vs. China Steel Corp | Evergreen Marine vs. Chang Hwa Commercial |
| Advanced Analog vs. Taiwan Semiconductor Manufacturing | Advanced Analog vs. MediaTek | Advanced Analog vs. United Microelectronics | Advanced Analog vs. Novatek Microelectronics 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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