Correlation Between Coremax Corp and Nan Ya
Can any of the company-specific risk be diversified away by investing in both Coremax Corp and Nan Ya 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 Coremax Corp and Nan Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coremax Corp and Nan Ya Plastics, you can compare the effects of market volatilities on Coremax Corp and Nan Ya 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 Coremax Corp with a short position of Nan Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coremax Corp and Nan Ya.
Diversification Opportunities for Coremax Corp and Nan Ya
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coremax and Nan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Coremax Corp and Nan Ya Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Ya Plastics and Coremax Corp 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 Coremax Corp are associated (or correlated) with Nan Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Ya Plastics has no effect on the direction of Coremax Corp i.e., Coremax Corp and Nan Ya go up and down completely randomly.
Pair Corralation between Coremax Corp and Nan Ya
Assuming the 90 days trading horizon Coremax Corp is expected to under-perform the Nan Ya. But the stock apears to be less risky and, when comparing its historical volatility, Coremax Corp is 2.02 times less risky than Nan Ya. The stock trades about -0.03 of its potential returns per unit of risk. The Nan Ya Plastics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,100 in Nan Ya Plastics on October 28, 2024 and sell it today you would earn a total of 135.00 from holding Nan Ya Plastics or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coremax Corp vs. Nan Ya Plastics
Performance |
| Timeline |
| Coremax Corp |
| Nan Ya Plastics |
Coremax Corp and Nan Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coremax Corp and Nan Ya
The main advantage of trading using opposite Coremax Corp and Nan Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coremax Corp position performs unexpectedly, Nan Ya 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 Nan Ya will offset losses from the drop in Nan Ya's long position.| Coremax Corp vs. Mechema Chemicals Int | Coremax Corp vs. China Steel Chemical | Coremax Corp vs. Delta Electronics | Coremax Corp vs. Hota Industrial Mfg |
| Nan Ya vs. Formosa Plastics Corp | Nan Ya vs. Formosa Chemicals Fibre | Nan Ya vs. China Steel Corp | Nan Ya vs. Formosa Petrochemical 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |