Correlation Between Chinese Maritime and Taita Chemical
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Taita 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 Chinese Maritime and Taita Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Maritime Transport and Taita Chemical Co, you can compare the effects of market volatilities on Chinese Maritime and Taita 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 Chinese Maritime with a short position of Taita Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Taita Chemical.
Diversification Opportunities for Chinese Maritime and Taita Chemical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chinese and Taita is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Taita Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taita Chemical and Chinese Maritime 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 Chinese Maritime Transport are associated (or correlated) with Taita Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taita Chemical has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Taita Chemical go up and down completely randomly.
Pair Corralation between Chinese Maritime and Taita Chemical
Assuming the 90 days trading horizon Chinese Maritime Transport is expected to generate 1.02 times more return on investment than Taita Chemical. However, Chinese Maritime is 1.02 times more volatile than Taita Chemical Co. It trades about 0.01 of its potential returns per unit of risk. Taita Chemical Co is currently generating about -0.04 per unit of risk. If you would invest 4,210 in Chinese Maritime Transport on November 19, 2024 and sell it today you would earn a total of 20.00 from holding Chinese Maritime Transport or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chinese Maritime Transport vs. Taita Chemical Co
Performance |
| Timeline |
| Chinese Maritime Tra |
| Taita Chemical |
Chinese Maritime and Taita Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Taita Chemical
The main advantage of trading using opposite Chinese Maritime and Taita Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Taita 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 Taita Chemical will offset losses from the drop in Taita Chemical's long position.| Chinese Maritime vs. U Ming Marine Transport | Chinese Maritime vs. Sincere Navigation Corp | Chinese Maritime vs. Taiwan Navigation Co | Chinese Maritime vs. Huaku Development Co |
| Taita Chemical vs. China General Plastics | Taita Chemical vs. Asia Polymer Corp | Taita Chemical vs. USI Corp | Taita Chemical vs. Grand Pacific Petrochemical |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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