Correlation Between Evergreen Marine and Vate Technology
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Vate Technology 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 Vate Technology 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 Vate Technology Co, you can compare the effects of market volatilities on Evergreen Marine and Vate Technology 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 Vate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Vate Technology.
Diversification Opportunities for Evergreen Marine and Vate Technology
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evergreen and Vate is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Vate Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vate Technology 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 Vate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vate Technology has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Vate Technology go up and down completely randomly.
Pair Corralation between Evergreen Marine and Vate Technology
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 0.96 times more return on investment than Vate Technology. However, Evergreen Marine Corp is 1.04 times less risky than Vate Technology. It trades about 0.15 of its potential returns per unit of risk. Vate Technology Co is currently generating about 0.09 per unit of risk. If you would invest 18,450 in Evergreen Marine Corp on September 12, 2024 and sell it today you would earn a total of 4,250 from holding Evergreen Marine Corp or generate 23.04% 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. Vate Technology Co
Performance |
| Timeline |
| Evergreen Marine Corp |
| Vate Technology |
Evergreen Marine and Vate Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Vate Technology
The main advantage of trading using opposite Evergreen Marine and Vate Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Vate Technology 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 Vate Technology will offset losses from the drop in Vate Technology's 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 |
| Vate Technology vs. Realtek Semiconductor Corp | Vate Technology vs. Easywell Biomedicals | Vate Technology vs. Promise Technology | Vate Technology vs. Posiflex Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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