Correlation Between Evergreen Marine and Chi Sheng
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Chi Sheng 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 Chi Sheng 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 Chi Sheng Chemical, you can compare the effects of market volatilities on Evergreen Marine and Chi Sheng 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 Chi Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Chi Sheng.
Diversification Opportunities for Evergreen Marine and Chi Sheng
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evergreen and Chi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Chi Sheng Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chi Sheng Chemical 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 Chi Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chi Sheng Chemical has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Chi Sheng go up and down completely randomly.
Pair Corralation between Evergreen Marine and Chi Sheng
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 3.29 times more return on investment than Chi Sheng. However, Evergreen Marine is 3.29 times more volatile than Chi Sheng Chemical. It trades about 0.09 of its potential returns per unit of risk. Chi Sheng Chemical is currently generating about 0.28 per unit of risk. If you would invest 20,450 in Evergreen Marine Corp on August 30, 2024 and sell it today you would earn a total of 950.00 from holding Evergreen Marine Corp or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Chi Sheng Chemical
Performance |
| Timeline |
| Evergreen Marine Corp |
| Chi Sheng Chemical |
Evergreen Marine and Chi Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Chi Sheng
The main advantage of trading using opposite Evergreen Marine and Chi Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Chi Sheng 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 Chi Sheng will offset losses from the drop in Chi Sheng'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 |
| Chi Sheng vs. Maxigen Biotech | Chi Sheng vs. Chunghwa Chemical Synthesis | Chi Sheng vs. Sinphar Pharmaceutical Co | Chi Sheng vs. ScinoPharm Taiwan |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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