Correlation Between Evergreen Marine and Hotel Royal
Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Hotel Royal 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 Hotel Royal 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 Hotel Royal Chihpen, you can compare the effects of market volatilities on Evergreen Marine and Hotel Royal 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 Hotel Royal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Hotel Royal.
Diversification Opportunities for Evergreen Marine and Hotel Royal
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Evergreen and Hotel is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Hotel Royal Chihpen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Royal Chihpen 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 Hotel Royal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Royal Chihpen has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Hotel Royal go up and down completely randomly.
Pair Corralation between Evergreen Marine and Hotel Royal
Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 1.02 times more return on investment than Hotel Royal. However, Evergreen Marine is 1.02 times more volatile than Hotel Royal Chihpen. It trades about 0.07 of its potential returns per unit of risk. Hotel Royal Chihpen is currently generating about -0.07 per unit of risk. If you would invest 19,300 in Evergreen Marine Corp on September 26, 2024 and sell it today you would earn a total of 3,900 from holding Evergreen Marine Corp or generate 20.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Evergreen Marine Corp vs. Hotel Royal Chihpen
Performance |
Timeline |
Evergreen Marine Corp |
Hotel Royal Chihpen |
Evergreen Marine and Hotel Royal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Evergreen Marine and Hotel Royal
The main advantage of trading using opposite Evergreen Marine and Hotel Royal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Marine position performs unexpectedly, Hotel Royal 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 Hotel Royal will offset losses from the drop in Hotel Royal's long position.Evergreen Marine vs. Yang Ming Marine | Evergreen Marine vs. Eva Airways Corp | Evergreen Marine vs. U Ming Marine Transport |
Hotel Royal vs. Formosa International Hotels | Hotel Royal vs. Ambassador Hotel | Hotel Royal vs. FDC International Hotels | Hotel Royal vs. First Hotel Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
CEOs Directory Screen CEOs from public companies around the world | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |