Correlation Between ECOVE Environment and Chinese Maritime
Can any of the company-specific risk be diversified away by investing in both ECOVE Environment 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 ECOVE Environment and Chinese Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECOVE Environment Corp and Chinese Maritime Transport, you can compare the effects of market volatilities on ECOVE Environment 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 ECOVE Environment with a short position of Chinese Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECOVE Environment and Chinese Maritime.
Diversification Opportunities for ECOVE Environment and Chinese Maritime
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ECOVE and Chinese is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding ECOVE Environment Corp 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 ECOVE Environment 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 ECOVE Environment Corp 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 ECOVE Environment i.e., ECOVE Environment and Chinese Maritime go up and down completely randomly.
Pair Corralation between ECOVE Environment and Chinese Maritime
Assuming the 90 days trading horizon ECOVE Environment Corp is expected to under-perform the Chinese Maritime. But the stock apears to be less risky and, when comparing its historical volatility, ECOVE Environment Corp is 2.32 times less risky than Chinese Maritime. The stock trades about -0.09 of its potential returns per unit of risk. The Chinese Maritime Transport is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,350 in Chinese Maritime Transport on August 28, 2024 and sell it today you would earn a total of 140.00 from holding Chinese Maritime Transport or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECOVE Environment Corp vs. Chinese Maritime Transport
Performance |
| Timeline |
| ECOVE Environment Corp |
| Chinese Maritime Tra |
ECOVE Environment and Chinese Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECOVE Environment and Chinese Maritime
The main advantage of trading using opposite ECOVE Environment and Chinese Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECOVE Environment 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.| ECOVE Environment vs. Cleanaway Co | ECOVE Environment vs. Taiwan Secom Co | ECOVE Environment vs. Sunny Friend Environmental | ECOVE Environment vs. TTET Union Corp |
| Chinese Maritime vs. Sunny Friend Environmental | Chinese Maritime vs. TTET Union Corp | Chinese Maritime vs. ECOVE Environment Corp | Chinese Maritime vs. Yulon Finance 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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