Correlation Between Evergreen Marine and Aces Electronics
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Aces Electronics 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 Aces Electronics 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 Aces Electronics Co, you can compare the effects of market volatilities on Evergreen Marine and Aces Electronics 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 Aces Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Aces Electronics.
Diversification Opportunities for Evergreen Marine and Aces Electronics
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evergreen and Aces is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Aces Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aces Electronics 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 Aces Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aces Electronics has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Aces Electronics go up and down completely randomly.
Pair Corralation between Evergreen Marine and Aces Electronics
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to under-perform the Aces Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Evergreen Marine Corp is 1.72 times less risky than Aces Electronics. The stock trades about -0.26 of its potential returns per unit of risk. The Aces Electronics Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 4,985 in Aces Electronics Co on October 27, 2024 and sell it today you would earn a total of 1,285 from holding Aces Electronics Co or generate 25.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Aces Electronics Co
Performance |
| Timeline |
| Evergreen Marine Corp |
| Aces Electronics |
Evergreen Marine and Aces Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Aces Electronics
The main advantage of trading using opposite Evergreen Marine and Aces Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Aces Electronics 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 Aces Electronics will offset losses from the drop in Aces Electronics' 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 |
| Aces Electronics vs. Chant Sincere Co | Aces Electronics vs. Altek Corp | Aces Electronics vs. Jentech Precision Industrial | Aces Electronics vs. Lotes 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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