Correlation Between Chinese Maritime and Shiny Chemical
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Shiny 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 Shiny 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 Shiny Chemical Industrial, you can compare the effects of market volatilities on Chinese Maritime and Shiny 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 Shiny Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Shiny Chemical.
Diversification Opportunities for Chinese Maritime and Shiny Chemical
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chinese and Shiny is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Shiny Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shiny Chemical Industrial 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 Shiny Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shiny Chemical Industrial has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Shiny Chemical go up and down completely randomly.
Pair Corralation between Chinese Maritime and Shiny Chemical
Assuming the 90 days trading horizon Chinese Maritime Transport is expected to generate 1.03 times more return on investment than Shiny Chemical. However, Chinese Maritime is 1.03 times more volatile than Shiny Chemical Industrial. It trades about 0.05 of its potential returns per unit of risk. Shiny Chemical Industrial is currently generating about -0.12 per unit of risk. If you would invest 4,395 in Chinese Maritime Transport on August 26, 2024 and sell it today you would earn a total of 135.00 from holding Chinese Maritime Transport or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Maritime Transport vs. Shiny Chemical Industrial
Performance |
| Timeline |
| Chinese Maritime Tra |
| Shiny Chemical Industrial |
Chinese Maritime and Shiny Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Shiny Chemical
The main advantage of trading using opposite Chinese Maritime and Shiny Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Shiny 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 Shiny Chemical will offset losses from the drop in Shiny Chemical's long position.| Chinese Maritime vs. Sunny Friend Environmental | Chinese Maritime vs. TTET Union Corp | Chinese Maritime vs. ECOVE Environment Corp | Chinese Maritime vs. Yulon Finance Corp |
| Shiny Chemical vs. Cheng Shin Rubber | Shiny Chemical vs. Taiwan Cement Corp | Shiny Chemical vs. China Steel Chemical | Shiny Chemical vs. Yulon Motor 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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