Correlation Between Chinese Maritime and ECOVE Environment
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and ECOVE Environment 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 ECOVE Environment 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 ECOVE Environment Corp, you can compare the effects of market volatilities on Chinese Maritime and ECOVE Environment 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 ECOVE Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and ECOVE Environment.
Diversification Opportunities for Chinese Maritime and ECOVE Environment
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chinese and ECOVE is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and ECOVE Environment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECOVE Environment Corp 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 ECOVE Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECOVE Environment Corp has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and ECOVE Environment go up and down completely randomly.
Pair Corralation between Chinese Maritime and ECOVE Environment
Assuming the 90 days trading horizon Chinese Maritime Transport is expected to under-perform the ECOVE Environment. In addition to that, Chinese Maritime is 2.52 times more volatile than ECOVE Environment Corp. It trades about -0.16 of its total potential returns per unit of risk. ECOVE Environment Corp is currently generating about 0.14 per unit of volatility. If you would invest 28,200 in ECOVE Environment Corp on October 7, 2024 and sell it today you would earn a total of 300.00 from holding ECOVE Environment Corp or generate 1.06% 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. ECOVE Environment Corp
Performance |
| Timeline |
| Chinese Maritime Tra |
| ECOVE Environment Corp |
Chinese Maritime and ECOVE Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and ECOVE Environment
The main advantage of trading using opposite Chinese Maritime and ECOVE Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, ECOVE Environment 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 ECOVE Environment will offset losses from the drop in ECOVE Environment'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 |
| ECOVE Environment vs. Cleanaway Co | ECOVE Environment vs. Taiwan Secom Co | ECOVE Environment vs. Sunny Friend Environmental | ECOVE Environment vs. TTET Union 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.
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