Correlation Between Cameo Communications and Evergreen International
Can any of the company-specific risk be diversified away by investing in both Cameo Communications and Evergreen International 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 Cameo Communications and Evergreen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cameo Communications and Evergreen International Storage, you can compare the effects of market volatilities on Cameo Communications and Evergreen International 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 Cameo Communications with a short position of Evergreen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameo Communications and Evergreen International.
Diversification Opportunities for Cameo Communications and Evergreen International
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cameo and Evergreen is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cameo Communications and Evergreen International Storag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen International and Cameo Communications 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 Cameo Communications are associated (or correlated) with Evergreen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen International has no effect on the direction of Cameo Communications i.e., Cameo Communications and Evergreen International go up and down completely randomly.
Pair Corralation between Cameo Communications and Evergreen International
Assuming the 90 days trading horizon Cameo Communications is expected to under-perform the Evergreen International. In addition to that, Cameo Communications is 1.22 times more volatile than Evergreen International Storage. It trades about -0.01 of its total potential returns per unit of risk. Evergreen International Storage is currently generating about 0.02 per unit of volatility. If you would invest 2,910 in Evergreen International Storage on August 28, 2024 and sell it today you would earn a total of 265.00 from holding Evergreen International Storage or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cameo Communications vs. Evergreen International Storag
Performance |
| Timeline |
| Cameo Communications |
| Evergreen International |
Cameo Communications and Evergreen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cameo Communications and Evergreen International
The main advantage of trading using opposite Cameo Communications and Evergreen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameo Communications position performs unexpectedly, Evergreen International 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 International will offset losses from the drop in Evergreen International's long position.| Cameo Communications vs. Gemtek Technology Co | Cameo Communications vs. CyberTAN Technology | Cameo Communications vs. Alpha Networks | Cameo Communications vs. D Link Corp |
| Evergreen International vs. Sincere Navigation Corp | Evergreen International vs. First Steamship Co | Evergreen International vs. Far Eastern Department | Evergreen International vs. China Container Terminal |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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