Correlation Between Evergreen Marine and TMP Steel
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and TMP Steel 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 TMP Steel 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 TMP Steel, you can compare the effects of market volatilities on Evergreen Marine and TMP Steel 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 TMP Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and TMP Steel.
Diversification Opportunities for Evergreen Marine and TMP Steel
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evergreen and TMP is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and TMP Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMP Steel 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 TMP Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMP Steel has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and TMP Steel go up and down completely randomly.
Pair Corralation between Evergreen Marine and TMP Steel
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 1.88 times more return on investment than TMP Steel. However, Evergreen Marine is 1.88 times more volatile than TMP Steel. It trades about 0.11 of its potential returns per unit of risk. TMP Steel is currently generating about -0.15 per unit of risk. If you would invest 20,550 in Evergreen Marine Corp on September 1, 2024 and sell it today you would earn a total of 1,150 from holding Evergreen Marine Corp or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. TMP Steel
Performance |
| Timeline |
| Evergreen Marine Corp |
| TMP Steel |
Evergreen Marine and TMP Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and TMP Steel
The main advantage of trading using opposite Evergreen Marine and TMP Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, TMP Steel 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 TMP Steel will offset losses from the drop in TMP Steel'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 |
| TMP Steel vs. Sunspring Metal Corp | TMP Steel vs. Microelectronics Technology | TMP Steel vs. Sun Max Tech | TMP Steel vs. United Radiant 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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