Correlation Between Wan Hai and Chainqui Construction
Can any of the company-specific risk be diversified away by investing in both Wan Hai and Chainqui Construction 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 Wan Hai and Chainqui Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wan Hai Lines and Chainqui Construction Development, you can compare the effects of market volatilities on Wan Hai and Chainqui Construction 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 Wan Hai with a short position of Chainqui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wan Hai and Chainqui Construction.
Diversification Opportunities for Wan Hai and Chainqui Construction
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wan and Chainqui is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wan Hai Lines and Chainqui Construction Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainqui Construction and Wan Hai 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 Wan Hai Lines are associated (or correlated) with Chainqui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainqui Construction has no effect on the direction of Wan Hai i.e., Wan Hai and Chainqui Construction go up and down completely randomly.
Pair Corralation between Wan Hai and Chainqui Construction
Assuming the 90 days trading horizon Wan Hai is expected to generate 1.67 times less return on investment than Chainqui Construction. In addition to that, Wan Hai is 1.57 times more volatile than Chainqui Construction Development. It trades about 0.01 of its total potential returns per unit of risk. Chainqui Construction Development is currently generating about 0.03 per unit of volatility. If you would invest 1,435 in Chainqui Construction Development on September 13, 2024 and sell it today you would earn a total of 260.00 from holding Chainqui Construction Development or generate 18.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wan Hai Lines vs. Chainqui Construction Developm
Performance |
| Timeline |
| Wan Hai Lines |
| Chainqui Construction |
Wan Hai and Chainqui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wan Hai and Chainqui Construction
The main advantage of trading using opposite Wan Hai and Chainqui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wan Hai position performs unexpectedly, Chainqui Construction 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 Chainqui Construction will offset losses from the drop in Chainqui Construction's long position.| Wan Hai vs. Yang Ming Marine | Wan Hai vs. U Ming Marine Transport | Wan Hai vs. Taiwan Navigation Co | Wan Hai vs. China Airlines |
| Chainqui Construction vs. Yang Ming Marine | Chainqui Construction vs. Wan Hai Lines | Chainqui Construction vs. U Ming Marine Transport | Chainqui Construction vs. Taiwan Navigation Co |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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