Correlation Between Chinese Maritime and Avalue Technology
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Avalue Technology 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 Avalue Technology 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 Avalue Technology, you can compare the effects of market volatilities on Chinese Maritime and Avalue Technology 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 Avalue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Avalue Technology.
Diversification Opportunities for Chinese Maritime and Avalue Technology
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chinese and Avalue is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Avalue Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalue Technology 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 Avalue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalue Technology has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Avalue Technology go up and down completely randomly.
Pair Corralation between Chinese Maritime and Avalue Technology
Assuming the 90 days trading horizon Chinese Maritime is expected to generate 1.12 times less return on investment than Avalue Technology. In addition to that, Chinese Maritime is 1.06 times more volatile than Avalue Technology. It trades about 0.4 of its total potential returns per unit of risk. Avalue Technology is currently generating about 0.48 per unit of volatility. If you would invest 9,100 in Avalue Technology on November 28, 2024 and sell it today you would earn a total of 2,100 from holding Avalue Technology or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Chinese Maritime Transport vs. Avalue Technology
Performance |
| Timeline |
| Chinese Maritime Tra |
| Avalue Technology |
Chinese Maritime and Avalue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Avalue Technology
The main advantage of trading using opposite Chinese Maritime and Avalue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Avalue Technology 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 Avalue Technology will offset losses from the drop in Avalue Technology'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 |
| Avalue Technology vs. Ligitek Electronics Co | Avalue Technology vs. Maxigen Biotech | Avalue Technology vs. Taiwan Chinsan Electronic | Avalue Technology vs. Everlight Electronics Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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