Correlation Between Evergreen Marine and Parade Technologies
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Parade Technologies 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 Parade Technologies 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 Parade Technologies, you can compare the effects of market volatilities on Evergreen Marine and Parade Technologies 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 Parade Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Parade Technologies.
Diversification Opportunities for Evergreen Marine and Parade Technologies
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evergreen and Parade is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Parade Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parade Technologies 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 Parade Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parade Technologies has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Parade Technologies go up and down completely randomly.
Pair Corralation between Evergreen Marine and Parade Technologies
Assuming the 90 days trading horizon Evergreen Marine is expected to generate 2.56 times less return on investment than Parade Technologies. In addition to that, Evergreen Marine is 1.28 times more volatile than Parade Technologies. It trades about 0.06 of its total potential returns per unit of risk. Parade Technologies is currently generating about 0.21 per unit of volatility. If you would invest 68,000 in Parade Technologies on September 13, 2024 and sell it today you would earn a total of 6,300 from holding Parade Technologies or generate 9.26% 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. Parade Technologies
Performance |
| Timeline |
| Evergreen Marine Corp |
| Parade Technologies |
Evergreen Marine and Parade Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Parade Technologies
The main advantage of trading using opposite Evergreen Marine and Parade Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Parade Technologies 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 Parade Technologies will offset losses from the drop in Parade Technologies' 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 |
| Parade Technologies vs. WIN Semiconductors | Parade Technologies vs. GlobalWafers Co | Parade Technologies vs. Novatek Microelectronics Corp | Parade Technologies vs. Ruentex Development 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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