Correlation Between Chinese Maritime and Sunny Friend
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Sunny Friend 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 Sunny Friend 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 Sunny Friend Environmental, you can compare the effects of market volatilities on Chinese Maritime and Sunny Friend 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 Sunny Friend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Sunny Friend.
Diversification Opportunities for Chinese Maritime and Sunny Friend
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chinese and Sunny is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Sunny Friend Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Friend Environ 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 Sunny Friend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Friend Environ has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Sunny Friend go up and down completely randomly.
Pair Corralation between Chinese Maritime and Sunny Friend
Assuming the 90 days trading horizon Chinese Maritime Transport is expected to generate 0.94 times more return on investment than Sunny Friend. However, Chinese Maritime Transport is 1.06 times less risky than Sunny Friend. It trades about 0.13 of its potential returns per unit of risk. Sunny Friend Environmental is currently generating about -0.2 per unit of risk. If you would invest 4,330 in Chinese Maritime Transport on August 25, 2024 and sell it today you would earn a total of 200.00 from holding Chinese Maritime Transport or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chinese Maritime Transport vs. Sunny Friend Environmental
Performance |
| Timeline |
| Chinese Maritime Tra |
| Sunny Friend Environ |
Chinese Maritime and Sunny Friend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chinese Maritime and Sunny Friend
The main advantage of trading using opposite Chinese Maritime and Sunny Friend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Sunny Friend 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 Sunny Friend will offset losses from the drop in Sunny Friend's long position.| Chinese Maritime vs. Sunny Friend Environmental | Chinese Maritime vs. Taiwan Secom Co | Chinese Maritime vs. TTET Union Corp | Chinese Maritime vs. ECOVE Environment Corp |
| Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Taiwan Secom Co | Sunny Friend vs. TTET Union Corp | Sunny Friend vs. Tehmag Foods |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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