Correlation Between Evergreen Marine and Sunfun Info
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Sunfun Info 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 Sunfun Info 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 Sunfun Info Co, you can compare the effects of market volatilities on Evergreen Marine and Sunfun Info 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 Sunfun Info. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Sunfun Info.
Diversification Opportunities for Evergreen Marine and Sunfun Info
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evergreen and Sunfun is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Sunfun Info Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunfun Info 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 Sunfun Info. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunfun Info has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Sunfun Info go up and down completely randomly.
Pair Corralation between Evergreen Marine and Sunfun Info
Assuming the 90 days trading horizon Evergreen Marine is expected to generate 34.94 times less return on investment than Sunfun Info. But when comparing it to its historical volatility, Evergreen Marine Corp is 40.06 times less risky than Sunfun Info. It trades about 0.11 of its potential returns per unit of risk. Sunfun Info Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,085 in Sunfun Info Co on September 1, 2024 and sell it today you would earn a total of 2,110 from holding Sunfun Info Co or generate 194.47% 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. Sunfun Info Co
Performance |
| Timeline |
| Evergreen Marine Corp |
| Sunfun Info |
Evergreen Marine and Sunfun Info Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Sunfun Info
The main advantage of trading using opposite Evergreen Marine and Sunfun Info positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Sunfun Info 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 Sunfun Info will offset losses from the drop in Sunfun Info's long position.| Evergreen Marine vs. BES Engineering Co | Evergreen Marine vs. Continental Holdings Corp | Evergreen Marine vs. Kee Tai Properties | Evergreen Marine vs. Hung Sheng Construction |
| Sunfun Info vs. Fortune Information Systems | Sunfun Info vs. Dadi Early Childhood Education | Sunfun Info vs. Simple Mart Retail | Sunfun Info vs. Datavan International |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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