Correlation Between Evergreen Marine and Yulon Finance
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Yulon 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 Yulon 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 Yulon Finance Corp, you can compare the effects of market volatilities on Evergreen Marine and Yulon 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 Yulon Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Yulon Finance.
Diversification Opportunities for Evergreen Marine and Yulon Finance
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evergreen and Yulon is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Yulon Finance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon 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 Yulon Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Finance Corp has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Yulon Finance go up and down completely randomly.
Pair Corralation between Evergreen Marine and Yulon Finance
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 11.37 times more return on investment than Yulon Finance. However, Evergreen Marine is 11.37 times more volatile than Yulon Finance Corp. It trades about 0.17 of its potential returns per unit of risk. Yulon Finance Corp is currently generating about 0.19 per unit of risk. If you would invest 18,300 in Evergreen Marine Corp on August 28, 2024 and sell it today you would earn a total of 4,500 from holding Evergreen Marine Corp or generate 24.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Yulon Finance Corp
Performance |
| Timeline |
| Evergreen Marine Corp |
| Yulon Finance Corp |
Evergreen Marine and Yulon Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Yulon Finance
The main advantage of trading using opposite Evergreen Marine and Yulon Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Yulon 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 Yulon Finance will offset losses from the drop in Yulon 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 |
| Yulon Finance vs. Tainet Communication System | Yulon Finance vs. Jinan Acetate Chemical | Yulon Finance vs. Pili International Multimedia | Yulon Finance vs. Evermore Chemical Industry |
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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