Correlation Between Eva Airways and Yang Ming
Can any of the company-specific risk be diversified away by investing in both Eva Airways and Yang Ming 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 Eva Airways and Yang Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eva Airways Corp and Yang Ming Marine, you can compare the effects of market volatilities on Eva Airways and Yang Ming 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 Eva Airways with a short position of Yang Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eva Airways and Yang Ming.
Diversification Opportunities for Eva Airways and Yang Ming
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eva and Yang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Eva Airways Corp and Yang Ming Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yang Ming Marine and Eva Airways 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 Eva Airways Corp are associated (or correlated) with Yang Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yang Ming Marine has no effect on the direction of Eva Airways i.e., Eva Airways and Yang Ming go up and down completely randomly.
Pair Corralation between Eva Airways and Yang Ming
Assuming the 90 days trading horizon Eva Airways is expected to generate 2.09 times less return on investment than Yang Ming. But when comparing it to its historical volatility, Eva Airways Corp is 1.72 times less risky than Yang Ming. It trades about 0.21 of its potential returns per unit of risk. Yang Ming Marine is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 6,810 in Yang Ming Marine on August 27, 2024 and sell it today you would earn a total of 840.00 from holding Yang Ming Marine or generate 12.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eva Airways Corp vs. Yang Ming Marine
Performance |
| Timeline |
| Eva Airways Corp |
| Yang Ming Marine |
Eva Airways and Yang Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eva Airways and Yang Ming
The main advantage of trading using opposite Eva Airways and Yang Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eva Airways position performs unexpectedly, Yang Ming 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 Yang Ming will offset losses from the drop in Yang Ming's long position.| Eva Airways vs. Sunny Friend Environmental | Eva Airways vs. TTET Union Corp | Eva Airways vs. ECOVE Environment Corp | Eva Airways vs. Yulon Finance Corp |
| Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |