Correlation Between Eva Airways and Kerry TJ
Can any of the company-specific risk be diversified away by investing in both Eva Airways and Kerry TJ 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 Eva Airways and Kerry TJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eva Airways Corp and Kerry TJ Logistics, you can compare the effects of market volatilities on Eva Airways and Kerry TJ 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 Eva Airways with a short position of Kerry TJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eva Airways and Kerry TJ.
Diversification Opportunities for Eva Airways and Kerry TJ
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eva and Kerry is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Eva Airways Corp and Kerry TJ Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry TJ Logistics and Eva Airways 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 Eva Airways Corp are associated (or correlated) with Kerry TJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry TJ Logistics has no effect on the direction of Eva Airways i.e., Eva Airways and Kerry TJ go up and down completely randomly.
Pair Corralation between Eva Airways and Kerry TJ
Assuming the 90 days trading horizon Eva Airways Corp is expected to generate 4.06 times more return on investment than Kerry TJ. However, Eva Airways is 4.06 times more volatile than Kerry TJ Logistics. It trades about 0.3 of its potential returns per unit of risk. Kerry TJ Logistics is currently generating about -0.3 per unit of risk. If you would invest 4,015 in Eva Airways Corp on September 26, 2024 and sell it today you would earn a total of 590.00 from holding Eva Airways Corp or generate 14.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Eva Airways Corp vs. Kerry TJ Logistics
Performance |
Timeline |
Eva Airways Corp |
Kerry TJ Logistics |
Eva Airways and Kerry TJ Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eva Airways and Kerry TJ
The main advantage of trading using opposite Eva Airways and Kerry TJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eva Airways position performs unexpectedly, Kerry TJ 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 Kerry TJ will offset losses from the drop in Kerry TJ's long position.Eva Airways vs. Yang Ming Marine | Eva Airways vs. Evergreen Marine Corp | Eva Airways vs. U Ming Marine Transport |
Kerry TJ vs. Yang Ming Marine | Kerry TJ vs. Evergreen Marine Corp | Kerry TJ vs. Eva Airways Corp | Kerry TJ vs. U Ming Marine Transport |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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