Correlation Between Chinese Maritime and Phoenix Silicon
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Phoenix Silicon 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 Phoenix Silicon 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 Phoenix Silicon International, you can compare the effects of market volatilities on Chinese Maritime and Phoenix Silicon 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 Phoenix Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Phoenix Silicon.
Diversification Opportunities for Chinese Maritime and Phoenix Silicon
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chinese and Phoenix is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Phoenix Silicon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Silicon Inte 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 Phoenix Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Silicon Inte has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Phoenix Silicon go up and down completely randomly.
Pair Corralation between Chinese Maritime and Phoenix Silicon
Assuming the 90 days trading horizon Chinese Maritime is expected to generate 3.44 times less return on investment than Phoenix Silicon. But when comparing it to its historical volatility, Chinese Maritime Transport is 2.29 times less risky than Phoenix Silicon. It trades about 0.07 of its potential returns per unit of risk. Phoenix Silicon International is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 12,250 in Phoenix Silicon International on August 30, 2024 and sell it today you would earn a total of 1,000.00 from holding Phoenix Silicon International or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Maritime Transport vs. Phoenix Silicon International
Performance |
| Timeline |
| Chinese Maritime Tra |
| Phoenix Silicon Inte |
Chinese Maritime and Phoenix Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Phoenix Silicon
The main advantage of trading using opposite Chinese Maritime and Phoenix Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Phoenix Silicon 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 Phoenix Silicon will offset losses from the drop in Phoenix Silicon's long position.| Chinese Maritime vs. Yulon Motor Co | Chinese Maritime vs. Far Eastern Department | Chinese Maritime vs. China Steel Corp | Chinese Maritime vs. Chang Hwa Commercial |
| Phoenix Silicon vs. Taiwan Semiconductor Manufacturing | Phoenix Silicon vs. MediaTek | Phoenix Silicon vs. United Microelectronics | Phoenix Silicon vs. Novatek Microelectronics 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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