Correlation Between Wan Hai and Chien Kuo
Can any of the company-specific risk be diversified away by investing in both Wan Hai and Chien Kuo 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 Chien Kuo 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 Chien Kuo Construction, you can compare the effects of market volatilities on Wan Hai and Chien Kuo 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 Chien Kuo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wan Hai and Chien Kuo.
Diversification Opportunities for Wan Hai and Chien Kuo
Modest diversification
The 3 months correlation between Wan and Chien is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Wan Hai Lines and Chien Kuo Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chien Kuo 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 Chien Kuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chien Kuo Construction has no effect on the direction of Wan Hai i.e., Wan Hai and Chien Kuo go up and down completely randomly.
Pair Corralation between Wan Hai and Chien Kuo
Assuming the 90 days trading horizon Wan Hai is expected to generate 5.89 times less return on investment than Chien Kuo. In addition to that, Wan Hai is 1.32 times more volatile than Chien Kuo Construction. It trades about 0.01 of its total potential returns per unit of risk. Chien Kuo Construction is currently generating about 0.09 per unit of volatility. If you would invest 1,130 in Chien Kuo Construction on September 12, 2024 and sell it today you would earn a total of 1,625 from holding Chien Kuo Construction or generate 143.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wan Hai Lines vs. Chien Kuo Construction
Performance |
| Timeline |
| Wan Hai Lines |
| Chien Kuo Construction |
Wan Hai and Chien Kuo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wan Hai and Chien Kuo
The main advantage of trading using opposite Wan Hai and Chien Kuo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wan Hai position performs unexpectedly, Chien Kuo 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 Chien Kuo will offset losses from the drop in Chien Kuo'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 |
| Chien Kuo vs. Yang Ming Marine | Chien Kuo vs. Wan Hai Lines | Chien Kuo vs. U Ming Marine Transport | Chien Kuo 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |