Correlation Between Markor International and China Marine

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

By analyzing existing cross correlation between Markor International Home and China Marine Information, you can compare the effects of market volatilities on Markor International and China Marine 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 Markor International with a short position of China Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markor International and China Marine.

Diversification Opportunities for Markor International and China Marine

0.4

Correlation Coefficient

Markor International  China Marine

Very weak diversification

The 3 months correlation between Markor and China is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Markor International Home and China Marine Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Marine Information and Markor International 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 Markor International Home are associated (or correlated) with China Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Marine Information has no effect on the direction of Markor International i.e., Markor International and China Marine go up and down completely randomly.

Pair Corralation between Markor International and China Marine

Assuming the 90 days trading horizon Markor International Home is expected to under-perform the China Marine. In addition to that, Markor International is 1.09 times more volatile than China Marine Information. It trades about -0.01 of its total potential returns per unit of risk. China Marine Information is currently generating about 0.03 per unit of volatility. If you would invest  2,322  in China Marine Information on September 28, 2024 and sell it today you would earn a total of  480.00  from holding China Marine Information or generate 20.67% return on investment over 90 days.

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

Markor International Home  vs.  China Marine Information

Markor International Home

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Markor International Home are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Markor International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

China Marine Information

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China Marine Information are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, China Marine sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Markor International and China Marine

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

The idea behind Markor International Home and China Marine Information 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.