Correlation Between Kuo Yang and Evergreen Marine
Can any of the company-specific risk be diversified away by investing in both Kuo Yang and Evergreen Marine 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 Kuo Yang and Evergreen Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuo Yang Construction and Evergreen Marine Corp, you can compare the effects of market volatilities on Kuo Yang and Evergreen Marine 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 Kuo Yang with a short position of Evergreen Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuo Yang and Evergreen Marine.
Diversification Opportunities for Kuo Yang and Evergreen Marine
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kuo and Evergreen is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kuo Yang Construction and Evergreen Marine Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen Marine Corp and Kuo Yang 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 Kuo Yang Construction are associated (or correlated) with Evergreen Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen Marine Corp has no effect on the direction of Kuo Yang i.e., Kuo Yang and Evergreen Marine go up and down completely randomly.
Pair Corralation between Kuo Yang and Evergreen Marine
Assuming the 90 days trading horizon Kuo Yang is expected to generate 3.27 times less return on investment than Evergreen Marine. But when comparing it to its historical volatility, Kuo Yang Construction is 1.23 times less risky than Evergreen Marine. It trades about 0.04 of its potential returns per unit of risk. Evergreen Marine Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 10,650 in Evergreen Marine Corp on October 4, 2024 and sell it today you would earn a total of 12,050 from holding Evergreen Marine Corp or generate 113.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kuo Yang Construction vs. Evergreen Marine Corp
Performance |
Timeline |
Kuo Yang Construction |
Evergreen Marine Corp |
Kuo Yang and Evergreen Marine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kuo Yang and Evergreen Marine
The main advantage of trading using opposite Kuo Yang and Evergreen Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuo Yang position performs unexpectedly, Evergreen Marine 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 Marine will offset losses from the drop in Evergreen Marine's long position.Kuo Yang vs. Kindom Construction Corp | Kuo Yang vs. Cathay Real Estate | Kuo Yang vs. Highwealth Construction Corp | Kuo Yang vs. Hung Sheng Construction |
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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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