Correlation Between Evergreen Marine and CKM Building
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and CKM Building 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 CKM Building 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 CKM Building Material, you can compare the effects of market volatilities on Evergreen Marine and CKM Building 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 CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and CKM Building.
Diversification Opportunities for Evergreen Marine and CKM Building
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evergreen and CKM is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and CKM Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKM Building Material 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 CKM Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKM Building Material has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and CKM Building go up and down completely randomly.
Pair Corralation between Evergreen Marine and CKM Building
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to under-perform the CKM Building. In addition to that, Evergreen Marine is 1.62 times more volatile than CKM Building Material. It trades about -0.27 of its total potential returns per unit of risk. CKM Building Material is currently generating about 0.12 per unit of volatility. If you would invest 3,475 in CKM Building Material on October 24, 2024 and sell it today you would earn a total of 115.00 from holding CKM Building Material or generate 3.31% 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. CKM Building Material
Performance |
Timeline |
Evergreen Marine Corp |
CKM Building Material |
Evergreen Marine and CKM Building Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Evergreen Marine and CKM Building
The main advantage of trading using opposite Evergreen Marine and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, CKM Building 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 CKM Building will offset losses from the drop in CKM Building'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 |
CKM Building vs. Sunspring Metal Corp | CKM Building vs. Buima Group | CKM Building vs. Champion Building Materials | CKM Building vs. MJ International 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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