Correlation Between Tachan Securities and Chinese Maritime
Can any of the company-specific risk be diversified away by investing in both Tachan Securities 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 Tachan Securities and Chinese Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tachan Securities Co and Chinese Maritime Transport, you can compare the effects of market volatilities on Tachan Securities 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 Tachan Securities with a short position of Chinese Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tachan Securities and Chinese Maritime.
Diversification Opportunities for Tachan Securities and Chinese Maritime
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tachan and Chinese is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tachan Securities Co 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 Tachan Securities 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 Tachan Securities Co 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 Tachan Securities i.e., Tachan Securities and Chinese Maritime go up and down completely randomly.
Pair Corralation between Tachan Securities and Chinese Maritime
Assuming the 90 days trading horizon Tachan Securities is expected to generate 2.44 times less return on investment than Chinese Maritime. But when comparing it to its historical volatility, Tachan Securities Co is 3.23 times less risky than Chinese Maritime. It trades about 0.02 of its potential returns per unit of risk. Chinese Maritime Transport is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,880 in Chinese Maritime Transport on October 9, 2024 and sell it today you would earn a total of 220.00 from holding Chinese Maritime Transport or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tachan Securities Co vs. Chinese Maritime Transport
Performance |
| Timeline |
| Tachan Securities |
| Chinese Maritime Tra |
Tachan Securities and Chinese Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tachan Securities and Chinese Maritime
The main advantage of trading using opposite Tachan Securities and Chinese Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tachan Securities 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.| Tachan Securities vs. Hung Sheng Construction | Tachan Securities vs. Mercuries Life Insurance | Tachan Securities vs. YungShin Global Holding | Tachan Securities vs. First Hotel Co |
| Chinese Maritime vs. Hota Industrial Mfg | Chinese Maritime vs. Sinbon Electronics Co | Chinese Maritime vs. Tong Hsing Electronic | Chinese Maritime vs. Flexium Interconnect |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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