Correlation Between Evergreen Marine and Ching Feng
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Ching Feng 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 Ching Feng 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 Ching Feng Home, you can compare the effects of market volatilities on Evergreen Marine and Ching Feng 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 Ching Feng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Ching Feng.
Diversification Opportunities for Evergreen Marine and Ching Feng
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evergreen and Ching is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Ching Feng Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ching Feng Home 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 Ching Feng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ching Feng Home has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Ching Feng go up and down completely randomly.
Pair Corralation between Evergreen Marine and Ching Feng
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to under-perform the Ching Feng. In addition to that, Evergreen Marine is 1.85 times more volatile than Ching Feng Home. It trades about -0.29 of its total potential returns per unit of risk. Ching Feng Home is currently generating about 0.03 per unit of volatility. If you would invest 2,990 in Ching Feng Home on October 23, 2024 and sell it today you would earn a total of 15.00 from holding Ching Feng Home or generate 0.5% 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. Ching Feng Home
Performance |
| Timeline |
| Evergreen Marine Corp |
| Ching Feng Home |
Evergreen Marine and Ching Feng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Ching Feng
The main advantage of trading using opposite Evergreen Marine and Ching Feng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Ching Feng 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 Ching Feng will offset losses from the drop in Ching Feng'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 |
| Ching Feng vs. Globe Union Industrial | Ching Feng vs. Taiwan Fu Hsing | Ching Feng vs. Taiwan Hon Chuan | Ching Feng vs. Feng Tay Enterprises |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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