Correlation Between Evergreen International and Ardentec
Can any of the company-specific risk be diversified away by investing in both Evergreen International and Ardentec 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 Ardentec 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 Ardentec, you can compare the effects of market volatilities on Evergreen International and Ardentec 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 Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen International and Ardentec.
Diversification Opportunities for Evergreen International and Ardentec
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evergreen and Ardentec is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen International Storag and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec 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 Ardentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardentec has no effect on the direction of Evergreen International i.e., Evergreen International and Ardentec go up and down completely randomly.
Pair Corralation between Evergreen International and Ardentec
Assuming the 90 days trading horizon Evergreen International Storage is expected to generate 0.66 times more return on investment than Ardentec. However, Evergreen International Storage is 1.51 times less risky than Ardentec. It trades about 0.04 of its potential returns per unit of risk. Ardentec is currently generating about -0.04 per unit of risk. If you would invest 3,070 in Evergreen International Storage on September 13, 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen International Storag vs. Ardentec
Performance |
| Timeline |
| Evergreen International |
| Ardentec |
Evergreen International and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen International and Ardentec
The main advantage of trading using opposite Evergreen International and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen International position performs unexpectedly, Ardentec 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 Ardentec will offset losses from the drop in Ardentec's long position.| Evergreen International vs. Sincere Navigation Corp | Evergreen International vs. First Steamship Co | Evergreen International vs. Far Eastern Department | Evergreen International vs. China Container Terminal |
| Ardentec vs. Sheng Yu Steel | Ardentec vs. Sunspring Metal Corp | Ardentec vs. Jentech Precision Industrial | Ardentec vs. Taiwan Steel Union |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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