Correlation Between Chinese Maritime and I Sheng
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and I Sheng 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 I Sheng 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 I Sheng Electric Wire, you can compare the effects of market volatilities on Chinese Maritime and I Sheng 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 I Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and I Sheng.
Diversification Opportunities for Chinese Maritime and I Sheng
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chinese and 6115 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and I Sheng Electric Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Sheng Electric 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 I Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Sheng Electric has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and I Sheng go up and down completely randomly.
Pair Corralation between Chinese Maritime and I Sheng
Assuming the 90 days trading horizon Chinese Maritime is expected to generate 4.29 times less return on investment than I Sheng. In addition to that, Chinese Maritime is 2.4 times more volatile than I Sheng Electric Wire. It trades about 0.01 of its total potential returns per unit of risk. I Sheng Electric Wire is currently generating about 0.06 per unit of volatility. If you would invest 4,230 in I Sheng Electric Wire on September 12, 2024 and sell it today you would earn a total of 1,000.00 from holding I Sheng Electric Wire or generate 23.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chinese Maritime Transport vs. I Sheng Electric Wire
Performance |
| Timeline |
| Chinese Maritime Tra |
| I Sheng Electric |
Chinese Maritime and I Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and I Sheng
The main advantage of trading using opposite Chinese Maritime and I Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, I Sheng 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 I Sheng will offset losses from the drop in I Sheng'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 |
| I Sheng vs. Unitech Computer Co | I Sheng vs. Chinese Maritime Transport | I Sheng vs. Cameo Communications | I Sheng vs. Compal Broadband Networks |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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