Correlation Between Eastern Media and Yang Ming
Can any of the company-specific risk be diversified away by investing in both Eastern Media and Yang Ming 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 Eastern Media and Yang Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Media International and Yang Ming Marine, you can compare the effects of market volatilities on Eastern Media and Yang Ming 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 Eastern Media with a short position of Yang Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Media and Yang Ming.
Diversification Opportunities for Eastern Media and Yang Ming
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastern and Yang is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Media International and Yang Ming Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yang Ming Marine and Eastern Media 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 Eastern Media International are associated (or correlated) with Yang Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yang Ming Marine has no effect on the direction of Eastern Media i.e., Eastern Media and Yang Ming go up and down completely randomly.
Pair Corralation between Eastern Media and Yang Ming
Assuming the 90 days trading horizon Eastern Media is expected to generate 20.93 times less return on investment than Yang Ming. In addition to that, Eastern Media is 1.2 times more volatile than Yang Ming Marine. It trades about 0.0 of its total potential returns per unit of risk. Yang Ming Marine is currently generating about 0.05 per unit of volatility. If you would invest 4,731 in Yang Ming Marine on December 4, 2024 and sell it today you would earn a total of 2,529 from holding Yang Ming Marine or generate 53.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Eastern Media International vs. Yang Ming Marine
Performance |
Timeline |
Eastern Media Intern |
Yang Ming Marine |
Eastern Media and Yang Ming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eastern Media and Yang Ming
The main advantage of trading using opposite Eastern Media and Yang Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Media position performs unexpectedly, Yang Ming 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 Yang Ming will offset losses from the drop in Yang Ming's long position.Eastern Media vs. Yang Ming Marine | Eastern Media vs. Wan Hai Lines | Eastern Media vs. U Ming Marine Transport | Eastern Media vs. Taiwan Navigation Co |
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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 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..
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