Correlation Between Chinese Maritime and Yang Ming
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Yang 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 Yang 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 Yang Ming Marine, you can compare the effects of market volatilities on Chinese Maritime and Yang 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 Yang Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Yang Ming.
Diversification Opportunities for Chinese Maritime and Yang Ming
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chinese and Yang is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Yang Ming Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yang 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 Yang Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yang Ming Marine has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Yang Ming go up and down completely randomly.
Pair Corralation between Chinese Maritime and Yang Ming
Assuming the 90 days trading horizon Chinese Maritime is expected to generate 12.32 times less return on investment than Yang Ming. But when comparing it to its historical volatility, Chinese Maritime Transport is 1.22 times less risky than Yang Ming. It trades about 0.01 of its potential returns per unit of risk. Yang Ming Marine is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,838 in Yang Ming Marine on September 12, 2024 and sell it today you would earn a total of 3,212 from holding Yang Ming Marine or generate 66.39% 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. Yang Ming Marine
Performance |
| Timeline |
| Chinese Maritime Tra |
| Yang Ming Marine |
Chinese Maritime and Yang Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Yang Ming
The main advantage of trading using opposite Chinese Maritime and Yang Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Yang 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 Yang Ming will offset losses from the drop in Yang Ming's long position.| Chinese Maritime vs. Yang Ming Marine | Chinese Maritime vs. Wan Hai Lines | Chinese Maritime vs. U Ming Marine Transport | Chinese Maritime vs. Taiwan Navigation Co |
| Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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