Correlation Between Wan Hai and Eva Airways
Can any of the company-specific risk be diversified away by investing in both Wan Hai and Eva Airways 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 Eva Airways 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 Eva Airways Corp, you can compare the effects of market volatilities on Wan Hai and Eva Airways 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 Eva Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wan Hai and Eva Airways.
Diversification Opportunities for Wan Hai and Eva Airways
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wan and Eva is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Wan Hai Lines and Eva Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eva Airways Corp 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 Eva Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eva Airways Corp has no effect on the direction of Wan Hai i.e., Wan Hai and Eva Airways go up and down completely randomly.
Pair Corralation between Wan Hai and Eva Airways
Assuming the 90 days trading horizon Wan Hai Lines is expected to generate 1.59 times more return on investment than Eva Airways. However, Wan Hai is 1.59 times more volatile than Eva Airways Corp. It trades about 0.04 of its potential returns per unit of risk. Eva Airways Corp is currently generating about 0.03 per unit of risk. If you would invest 6,150 in Wan Hai Lines on August 31, 2024 and sell it today you would earn a total of 2,150 from holding Wan Hai Lines or generate 34.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Wan Hai Lines vs. Eva Airways Corp
Performance |
| Timeline |
| Wan Hai Lines |
| Eva Airways Corp |
Wan Hai and Eva Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wan Hai and Eva Airways
The main advantage of trading using opposite Wan Hai and Eva Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wan Hai position performs unexpectedly, Eva Airways 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 Eva Airways will offset losses from the drop in Eva Airways' long position.| Wan Hai vs. Yang Ming Marine | Wan Hai vs. Evergreen Marine Corp | Wan Hai vs. Eva Airways Corp | Wan Hai vs. China Airlines |
| Eva Airways vs. BES Engineering Co | Eva Airways vs. Continental Holdings Corp | Eva Airways vs. Kee Tai Properties | Eva Airways vs. Hung Sheng Construction |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |