Correlation Between Evergreen International and Tze Shin
Can any of the company-specific risk be diversified away by investing in both Evergreen International and Tze Shin 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 International and Tze Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evergreen International Storage and Tze Shin International, you can compare the effects of market volatilities on Evergreen International and Tze Shin 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 International with a short position of Tze Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen International and Tze Shin.
Diversification Opportunities for Evergreen International and Tze Shin
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Evergreen and Tze is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen International Storag and Tze Shin International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tze Shin International and Evergreen International 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 International Storage are associated (or correlated) with Tze Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tze Shin International has no effect on the direction of Evergreen International i.e., Evergreen International and Tze Shin go up and down completely randomly.
Pair Corralation between Evergreen International and Tze Shin
Assuming the 90 days trading horizon Evergreen International Storage is expected to generate 0.82 times more return on investment than Tze Shin. However, Evergreen International Storage is 1.22 times less risky than Tze Shin. It trades about 0.03 of its potential returns per unit of risk. Tze Shin International is currently generating about -0.03 per unit of risk. If you would invest 3,080 in Evergreen International Storage on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Evergreen International Storage or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Evergreen International Storag vs. Tze Shin International
Performance |
| Timeline |
| Evergreen International |
| Tze Shin International |
Evergreen International and Tze Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen International and Tze Shin
The main advantage of trading using opposite Evergreen International and Tze Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen International position performs unexpectedly, Tze Shin 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 Tze Shin will offset losses from the drop in Tze Shin's long position.| Evergreen International vs. BES Engineering Co | Evergreen International vs. Continental Holdings Corp | Evergreen International vs. Kee Tai Properties | Evergreen International vs. Hung Sheng Construction |
| Tze Shin vs. BES Engineering Co | Tze Shin vs. Continental Holdings Corp | Tze Shin vs. Kee Tai Properties | Tze Shin vs. Hung Sheng Construction |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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