Correlation Between China Airlines and Everlight Chemical
Can any of the company-specific risk be diversified away by investing in both China Airlines and Everlight Chemical 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 China Airlines and Everlight Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Airlines and Everlight Chemical Industrial, you can compare the effects of market volatilities on China Airlines and Everlight Chemical 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 China Airlines with a short position of Everlight Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Airlines and Everlight Chemical.
Diversification Opportunities for China Airlines and Everlight Chemical
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Everlight is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding China Airlines and Everlight Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everlight Chemical and China Airlines 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 China Airlines are associated (or correlated) with Everlight Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everlight Chemical has no effect on the direction of China Airlines i.e., China Airlines and Everlight Chemical go up and down completely randomly.
Pair Corralation between China Airlines and Everlight Chemical
Assuming the 90 days trading horizon China Airlines is expected to generate 0.93 times more return on investment than Everlight Chemical. However, China Airlines is 1.07 times less risky than Everlight Chemical. It trades about 0.04 of its potential returns per unit of risk. Everlight Chemical Industrial is currently generating about 0.02 per unit of risk. If you would invest 1,935 in China Airlines on October 21, 2024 and sell it today you would earn a total of 685.00 from holding China Airlines or generate 35.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Airlines vs. Everlight Chemical Industrial
Performance |
| Timeline |
| China Airlines |
| Everlight Chemical |
China Airlines and Everlight Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Airlines and Everlight Chemical
The main advantage of trading using opposite China Airlines and Everlight Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Airlines position performs unexpectedly, Everlight Chemical 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 Everlight Chemical will offset losses from the drop in Everlight Chemical's long position.| China Airlines vs. Eva Airways Corp | China Airlines vs. Evergreen Marine Corp | China Airlines vs. Yang Ming Marine | China Airlines vs. China Steel Corp |
| Everlight Chemical vs. Oriental Union Chemical | Everlight Chemical vs. Ho Tung Chemical | Everlight Chemical vs. China Man Made Fiber | Everlight Chemical vs. Sunko Ink Co |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |