Correlation Between La Kaffa and Evergreen Marine
Can any of the company-specific risk be diversified away by investing in both La Kaffa and Evergreen Marine 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 La Kaffa and Evergreen Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between La Kaffa International and Evergreen Marine Corp, you can compare the effects of market volatilities on La Kaffa and Evergreen Marine 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 La Kaffa with a short position of Evergreen Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of La Kaffa and Evergreen Marine.
Diversification Opportunities for La Kaffa and Evergreen Marine
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between 2732 and Evergreen is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding La Kaffa International and Evergreen Marine Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen Marine Corp and La Kaffa 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 La Kaffa International are associated (or correlated) with Evergreen Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen Marine Corp has no effect on the direction of La Kaffa i.e., La Kaffa and Evergreen Marine go up and down completely randomly.
Pair Corralation between La Kaffa and Evergreen Marine
Assuming the 90 days trading horizon La Kaffa is expected to generate 1.86 times less return on investment than Evergreen Marine. But when comparing it to its historical volatility, La Kaffa International is 2.76 times less risky than Evergreen Marine. It trades about 0.14 of its potential returns per unit of risk. Evergreen Marine Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 22,050 in Evergreen Marine Corp on September 12, 2024 and sell it today you would earn a total of 1,050 from holding Evergreen Marine Corp or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
La Kaffa International vs. Evergreen Marine Corp
Performance |
| Timeline |
| La Kaffa International |
| Evergreen Marine Corp |
La Kaffa and Evergreen Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with La Kaffa and Evergreen Marine
The main advantage of trading using opposite La Kaffa and Evergreen Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if La Kaffa position performs unexpectedly, Evergreen Marine 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 Evergreen Marine will offset losses from the drop in Evergreen Marine's long position.| La Kaffa vs. HOYA Resort Hotel | La Kaffa vs. Chicony Power Technology | La Kaffa vs. United Radiant Technology | La Kaffa vs. Ambassador Hotel |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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