Correlation Between Evergreen Marine and Super Dragon
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Super Dragon 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 Super Dragon 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 Super Dragon Technology, you can compare the effects of market volatilities on Evergreen Marine and Super Dragon 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 Super Dragon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Super Dragon.
Diversification Opportunities for Evergreen Marine and Super Dragon
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Evergreen and Super is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Super Dragon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Dragon Technology 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 Super Dragon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Dragon Technology has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Super Dragon go up and down completely randomly.
Pair Corralation between Evergreen Marine and Super Dragon
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 0.86 times more return on investment than Super Dragon. However, Evergreen Marine Corp is 1.16 times less risky than Super Dragon. It trades about 0.24 of its potential returns per unit of risk. Super Dragon Technology is currently generating about -0.09 per unit of risk. If you would invest 20,600 in Evergreen Marine Corp on August 28, 2024 and sell it today you would earn a total of 2,200 from holding Evergreen Marine Corp or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Evergreen Marine Corp vs. Super Dragon Technology
Performance |
| Timeline |
| Evergreen Marine Corp |
| Super Dragon Technology |
Evergreen Marine and Super Dragon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Marine and Super Dragon
The main advantage of trading using opposite Evergreen Marine and Super Dragon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Super Dragon 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 Super Dragon will offset losses from the drop in Super Dragon's long position.| Evergreen Marine vs. Yang Ming Marine | Evergreen Marine vs. Wan Hai Lines | Evergreen Marine vs. China Airlines | Evergreen Marine vs. China Steel Corp |
| Super Dragon vs. Ton Yi Industrial | Super Dragon vs. Shinih Enterprise Co | Super Dragon vs. Kingcan Holdings | Super Dragon vs. Zinwell |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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