Correlation Between Evergreen Marine and Dimension Computer

Can any of the company-specific risk be diversified away by investing in both Evergreen Marine and Dimension Computer 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 Dimension Computer 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 Dimension Computer Technology, you can compare the effects of market volatilities on Evergreen Marine and Dimension Computer 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 Dimension Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Marine and Dimension Computer.

Diversification Opportunities for Evergreen Marine and Dimension Computer

-0.36

Correlation Coefficient

Evergreen Marine  Dimension Computer

Very good diversification

The 3 months correlation between Evergreen and Dimension is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Marine Corp and Dimension Computer Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimension Computer 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 Dimension Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimension Computer has no effect on the direction of Evergreen Marine i.e., Evergreen Marine and Dimension Computer go up and down completely randomly.

Pair Corralation between Evergreen Marine and Dimension Computer

Assuming the 90 days trading horizon Evergreen Marine Corp is expected to generate 0.92 times more return on investment than Dimension Computer. However, Evergreen Marine Corp is 1.08 times less risky than Dimension Computer. It trades about 0.15 of its potential returns per unit of risk. Dimension Computer Technology is currently generating about 0.02 per unit of risk. If you would invest  18,450  in Evergreen Marine Corp on September 15, 2024 and sell it today you would earn a total of  4,550  from holding Evergreen Marine Corp or generate 24.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Evergreen Marine Corp  vs.  Dimension Computer Technology

Evergreen Marine Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evergreen Marine Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Evergreen Marine showed solid returns over the last few months and may actually be approaching a breakup point.

Dimension Computer

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dimension Computer Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Dimension Computer 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 Dimension Computer

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

The idea behind Evergreen Marine Corp and Dimension Computer Technology 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..