Correlation Between Chinese Maritime and Chernan Metal
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Chernan Metal 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 Chernan Metal 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 Chernan Metal Industrial, you can compare the effects of market volatilities on Chinese Maritime and Chernan Metal 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 Chernan Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Chernan Metal.
Diversification Opportunities for Chinese Maritime and Chernan Metal
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chinese and Chernan is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Chernan Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chernan Metal 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 Chernan Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chernan Metal Industrial has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Chernan Metal go up and down completely randomly.
Pair Corralation between Chinese Maritime and Chernan Metal
Assuming the 90 days trading horizon Chinese Maritime is expected to generate 1.96 times less return on investment than Chernan Metal. But when comparing it to its historical volatility, Chinese Maritime Transport is 1.06 times less risky than Chernan Metal. It trades about 0.02 of its potential returns per unit of risk. Chernan Metal Industrial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,420 in Chernan Metal Industrial on September 2, 2024 and sell it today you would earn a total of 635.00 from holding Chernan Metal Industrial or generate 18.57% 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. Chernan Metal Industrial
Performance |
| Timeline |
| Chinese Maritime Tra |
| Chernan Metal Industrial |
Chinese Maritime and Chernan Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Chernan Metal
The main advantage of trading using opposite Chinese Maritime and Chernan Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Chernan Metal 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 Chernan Metal will offset losses from the drop in Chernan Metal's long position.| Chinese Maritime vs. BES Engineering Co | Chinese Maritime vs. Continental Holdings Corp | Chinese Maritime vs. Kee Tai Properties | Chinese Maritime vs. Hung Sheng Construction |
| Chernan Metal vs. Yang Ming Marine | Chernan Metal vs. Wan Hai Lines | Chernan Metal vs. Hsin Kuang Steel | Chernan Metal vs. Evergreen Marine 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |