Correlation Between Chinese Maritime and U Ming
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and U Ming 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 U Ming 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 U Ming Marine Transport, you can compare the effects of market volatilities on Chinese Maritime and U Ming 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 U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and U Ming.
Diversification Opportunities for Chinese Maritime and U Ming
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chinese and 2606 is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and U Ming Marine Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Ming Marine 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 U Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Ming Marine has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and U Ming go up and down completely randomly.
Pair Corralation between Chinese Maritime and U Ming
Assuming the 90 days trading horizon Chinese Maritime is expected to generate 3.32 times less return on investment than U Ming. In addition to that, Chinese Maritime is 1.49 times more volatile than U Ming Marine Transport. It trades about 0.05 of its total potential returns per unit of risk. U Ming Marine Transport is currently generating about 0.27 per unit of volatility. If you would invest 5,570 in U Ming Marine Transport on September 1, 2024 and sell it today you would earn a total of 390.00 from holding U Ming Marine Transport or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Maritime Transport vs. U Ming Marine Transport
Performance |
| Timeline |
| Chinese Maritime Tra |
| U Ming Marine |
Chinese Maritime and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and U Ming
The main advantage of trading using opposite Chinese Maritime and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, U Ming 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 U Ming will offset losses from the drop in U Ming'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 |
| U Ming vs. Sincere Navigation Corp | U Ming vs. Wan Hai Lines | U Ming vs. Yang Ming Marine | U Ming vs. Formosa Chemicals Fibre |
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 Stocks Directory module to find actively traded stocks across global markets.
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