Correlation Between Evergreen Marine and TPK Holding

Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and TPK Holding 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 Evergreen Marine and TPK Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Evergreen Marine Corp and TPK Holding Co, you can compare the effects of market volatilities on Evergreen Marine and TPK Holding 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 Evergreen Marine with a short position of TPK Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and TPK Holding.

Diversification Opportunities for Evergreen Marine and TPK Holding

0.09

Correlation Coefficient

Evergreen Marine  TPK Holding

Significant diversification

The 3 months correlation between Evergreen and TPK is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and TPK Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPK Holding and Evergreen Marine 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 Evergreen Marine Corp are associated (or correlated) with TPK Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPK Holding has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and TPK Holding go up and down completely randomly.

Pair Corralation between Evergreen Marine and TPK Holding

Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 1.28 times more return on investment than TPK Holding. However, Evergreen Marine is 1.28 times more volatile than TPK Holding Co. It trades about 0.0 of its potential returns per unit of risk. TPK Holding Co is currently generating about -0.06 per unit of risk. If you would invest  22,550  in Evergreen Marine Corp on December 29, 2024 and sell it today you would lose (200.00) from holding Evergreen Marine Corp or give up 0.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

Evergreen Marine Corp  vs.  TPK Holding Co

Evergreen Marine Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evergreen Marine Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Evergreen Marine is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

TPK Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days TPK Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, TPK Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Evergreen Marine and TPK Holding

The main advantage of trading using opposite Evergreen Marine and TPK Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, TPK Holding 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 TPK Holding will offset losses from the drop in TPK Holding's long position.

The idea behind Evergreen Marine Corp and TPK Holding Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.