Correlation Between Chernan Metal and Chinese Maritime
Can any of the company-specific risk be diversified away by investing in both Chernan Metal and Chinese Maritime 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 Chernan Metal and Chinese Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chernan Metal Industrial and Chinese Maritime Transport, you can compare the effects of market volatilities on Chernan Metal and Chinese Maritime 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 Chernan Metal with a short position of Chinese Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chernan Metal and Chinese Maritime.
Diversification Opportunities for Chernan Metal and Chinese Maritime
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chernan and Chinese is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chernan Metal Industrial and Chinese Maritime Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Maritime Tra and Chernan Metal 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 Chernan Metal Industrial are associated (or correlated) with Chinese Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Maritime Tra has no effect on the direction of Chernan Metal i.e., Chernan Metal and Chinese Maritime go up and down completely randomly.
Pair Corralation between Chernan Metal and Chinese Maritime
Assuming the 90 days trading horizon Chernan Metal Industrial is expected to generate 1.06 times more return on investment than Chinese Maritime. However, Chernan Metal is 1.06 times more volatile than Chinese Maritime Transport. It trades about 0.03 of its potential returns per unit of risk. Chinese Maritime Transport is currently generating about 0.02 per unit of risk. If you would invest 3,420 in Chernan Metal Industrial on September 2, 2024 and sell it today you would earn a total of 635.00 from holding Chernan Metal Industrial or generate 18.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chernan Metal Industrial vs. Chinese Maritime Transport
Performance |
| Timeline |
| Chernan Metal Industrial |
| Chinese Maritime Tra |
Chernan Metal and Chinese Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chernan Metal and Chinese Maritime
The main advantage of trading using opposite Chernan Metal and Chinese Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chernan Metal position performs unexpectedly, Chinese Maritime 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 Chinese Maritime will offset losses from the drop in Chinese Maritime's long position.| Chernan Metal vs. Yang Ming Marine | Chernan Metal vs. Wan Hai Lines | Chernan Metal vs. Hsin Kuang Steel | Chernan Metal vs. Evergreen Marine Corp |
| Chinese Maritime vs. BES Engineering Co | Chinese Maritime vs. Continental Holdings Corp | Chinese Maritime vs. Kee Tai Properties | Chinese Maritime 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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