Correlation Between Chinese Maritime and Camellia Metal
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Camellia Metal 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 Camellia Metal 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 Camellia Metal Co, you can compare the effects of market volatilities on Chinese Maritime and Camellia Metal 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 Camellia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Camellia Metal.
Diversification Opportunities for Chinese Maritime and Camellia Metal
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chinese and Camellia is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Camellia Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Metal 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 Camellia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Metal has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Camellia Metal go up and down completely randomly.
Pair Corralation between Chinese Maritime and Camellia Metal
Assuming the 90 days trading horizon Chinese Maritime Transport is expected to generate 1.46 times more return on investment than Camellia Metal. However, Chinese Maritime is 1.46 times more volatile than Camellia Metal Co. It trades about 0.02 of its potential returns per unit of risk. Camellia Metal Co is currently generating about -0.02 per unit of risk. If you would invest 4,085 in Chinese Maritime Transport on September 2, 2024 and sell it today you would earn a total of 215.00 from holding Chinese Maritime Transport or generate 5.26% 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. Camellia Metal Co
Performance |
| Timeline |
| Chinese Maritime Tra |
| Camellia Metal |
Chinese Maritime and Camellia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Camellia Metal
The main advantage of trading using opposite Chinese Maritime and Camellia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Camellia Metal 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 Camellia Metal will offset losses from the drop in Camellia Metal's long position.| Chinese Maritime vs. BES Engineering Co | Chinese Maritime vs. Continental Holdings Corp | Chinese Maritime vs. Kee Tai Properties | Chinese Maritime vs. Hung Sheng Construction |
| Camellia Metal vs. Yang Ming Marine | Camellia Metal vs. Wan Hai Lines | Camellia Metal vs. Hsin Kuang Steel | Camellia Metal vs. Evergreen Marine Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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