Correlation Between Evergreen Marine and Hotai Finance
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Hotai Finance 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 Hotai Finance 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 Hotai Finance Corp, you can compare the effects of market volatilities on Evergreen Marine and Hotai Finance 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 Hotai Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Hotai Finance.
Diversification Opportunities for Evergreen Marine and Hotai Finance
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evergreen and Hotai is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Hotai Finance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotai Finance Corp 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 Hotai Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotai Finance Corp has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Hotai Finance go up and down completely randomly.
Pair Corralation between Evergreen Marine and Hotai Finance
Assuming the 90 days trading horizon Evergreen Marine is expected to generate 1.14 times less return on investment than Hotai Finance. But when comparing it to its historical volatility, Evergreen Marine Corp is 3.72 times less risky than Hotai Finance. It trades about 0.1 of its potential returns per unit of risk. Hotai Finance Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,919 in Hotai Finance Corp on August 27, 2024 and sell it today you would earn a total of 511.00 from holding Hotai Finance Corp or generate 6.45% 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. Hotai Finance Corp
Performance |
| Timeline |
| Evergreen Marine Corp |
| Hotai Finance Corp |
Evergreen Marine and Hotai Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Hotai Finance
The main advantage of trading using opposite Evergreen Marine and Hotai Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Hotai Finance 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 Hotai Finance will offset losses from the drop in Hotai Finance's long position.| Evergreen Marine vs. Sunny Friend Environmental | Evergreen Marine vs. TTET Union Corp | Evergreen Marine vs. ECOVE Environment Corp | Evergreen Marine vs. Yulon Finance Corp |
| Hotai Finance vs. Chailease Holding Co | Hotai Finance vs. Yulon Finance Corp | Hotai Finance vs. Pou Chen Corp | Hotai Finance vs. Ruentex Industries |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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