Correlation Between Chinese Maritime and Mercuries Life
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Mercuries Life 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 Mercuries Life 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 Mercuries Life Insurance, you can compare the effects of market volatilities on Chinese Maritime and Mercuries Life 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 Mercuries Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Mercuries Life.
Diversification Opportunities for Chinese Maritime and Mercuries Life
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chinese and Mercuries is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Mercuries Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercuries Life Insurance 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 Mercuries Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercuries Life Insurance has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Mercuries Life go up and down completely randomly.
Pair Corralation between Chinese Maritime and Mercuries Life
Assuming the 90 days trading horizon Chinese Maritime Transport is expected to generate 1.48 times more return on investment than Mercuries Life. However, Chinese Maritime is 1.48 times more volatile than Mercuries Life Insurance. It trades about 0.05 of its potential returns per unit of risk. Mercuries Life Insurance is currently generating about -0.15 per unit of risk. If you would invest 4,225 in Chinese Maritime Transport on September 1, 2024 and sell it today you would earn a total of 75.00 from holding Chinese Maritime Transport or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Maritime Transport vs. Mercuries Life Insurance
Performance |
| Timeline |
| Chinese Maritime Tra |
| Mercuries Life Insurance |
Chinese Maritime and Mercuries Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Mercuries Life
The main advantage of trading using opposite Chinese Maritime and Mercuries Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Mercuries Life 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 Mercuries Life will offset losses from the drop in Mercuries Life'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 |
| Mercuries Life vs. Central Reinsurance Corp | Mercuries Life vs. Huaku Development Co | Mercuries Life vs. Fubon Financial Holding | Mercuries Life vs. CTBC Financial Holding |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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