Correlation Between Yang Ming and Ever Clear
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Ever Clear 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 Yang Ming and Ever Clear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yang Ming Marine and Ever Clear Environmental Eng, you can compare the effects of market volatilities on Yang Ming and Ever Clear 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 Yang Ming with a short position of Ever Clear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Ever Clear.
Diversification Opportunities for Yang Ming and Ever Clear
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yang and Ever is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Ever Clear Environmental Eng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ever Clear Environme and Yang Ming 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 Yang Ming Marine are associated (or correlated) with Ever Clear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ever Clear Environme has no effect on the direction of Yang Ming i.e., Yang Ming and Ever Clear go up and down completely randomly.
Pair Corralation between Yang Ming and Ever Clear
Assuming the 90 days trading horizon Yang Ming Marine is expected to under-perform the Ever Clear. In addition to that, Yang Ming is 1.5 times more volatile than Ever Clear Environmental Eng. It trades about -0.33 of its total potential returns per unit of risk. Ever Clear Environmental Eng is currently generating about 0.15 per unit of volatility. If you would invest 3,710 in Ever Clear Environmental Eng on October 25, 2024 and sell it today you would earn a total of 165.00 from holding Ever Clear Environmental Eng or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Ever Clear Environmental Eng
Performance |
| Timeline |
| Yang Ming Marine |
| Ever Clear Environme |
Yang Ming and Ever Clear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Ever Clear
The main advantage of trading using opposite Yang Ming and Ever Clear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Ever Clear 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 Ever Clear will offset losses from the drop in Ever Clear's long position.| Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways Corp |
| Ever Clear vs. Central Reinsurance Corp | Ever Clear vs. Microelectronics Technology | Ever Clear vs. Posiflex Technology | Ever Clear vs. SciVision Biotech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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