Correlation Between Chinese Maritime and Skardin Industrial
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Skardin Industrial 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 Skardin Industrial 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 Skardin Industrial, you can compare the effects of market volatilities on Chinese Maritime and Skardin Industrial 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 Skardin Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Skardin Industrial.
Diversification Opportunities for Chinese Maritime and Skardin Industrial
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chinese and Skardin is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Skardin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skardin 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 Skardin Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skardin Industrial has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Skardin Industrial go up and down completely randomly.
Pair Corralation between Chinese Maritime and Skardin Industrial
Assuming the 90 days trading horizon Chinese Maritime Transport is expected to generate 0.41 times more return on investment than Skardin Industrial. However, Chinese Maritime Transport is 2.44 times less risky than Skardin Industrial. It trades about 0.05 of its potential returns per unit of risk. Skardin Industrial is currently generating about -0.17 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. Skardin Industrial
Performance |
| Timeline |
| Chinese Maritime Tra |
| Skardin Industrial |
Chinese Maritime and Skardin Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Skardin Industrial
The main advantage of trading using opposite Chinese Maritime and Skardin Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Skardin Industrial 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 Skardin Industrial will offset losses from the drop in Skardin Industrial'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 |
| Skardin Industrial vs. Accton Technology Corp | Skardin Industrial vs. HTC Corp | Skardin Industrial vs. Wistron NeWeb Corp | Skardin Industrial vs. Arcadyan Technology 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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