Correlation Between Evergreen International and President Chain
Can any of the company-specific risk be diversified away by investing in both Evergreen International and President Chain 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 President Chain 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 President Chain Store, you can compare the effects of market volatilities on Evergreen International and President Chain 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 President Chain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen International and President Chain.
Diversification Opportunities for Evergreen International and President Chain
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evergreen and President is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen International Storag and President Chain Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Chain Store 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 President Chain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Chain Store has no effect on the direction of Evergreen International i.e., Evergreen International and President Chain go up and down completely randomly.
Pair Corralation between Evergreen International and President Chain
Assuming the 90 days trading horizon Evergreen International Storage is expected to generate 1.92 times more return on investment than President Chain. However, Evergreen International is 1.92 times more volatile than President Chain Store. It trades about 0.02 of its potential returns per unit of risk. President Chain Store is currently generating about 0.01 per unit of risk. If you would invest 2,765 in Evergreen International Storage on September 4, 2024 and sell it today you would earn a total of 335.00 from holding Evergreen International Storage or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen International Storag vs. President Chain Store
Performance |
| Timeline |
| Evergreen International |
| President Chain Store |
Evergreen International and President Chain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen International and President Chain
The main advantage of trading using opposite Evergreen International and President Chain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen International position performs unexpectedly, President Chain 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 President Chain will offset losses from the drop in President Chain's long position.The idea behind Evergreen International Storage and President Chain Store pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| President Chain vs. Uni President Enterprises Corp | President Chain vs. Formosa Plastics Corp | President Chain vs. Chunghwa Telecom Co | President Chain vs. Fubon Financial Holding |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |