Correlation Between Chinese Maritime and Senao International
Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and Senao International 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 Chinese Maritime and Senao International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chinese Maritime Transport and Senao International Co, you can compare the effects of market volatilities on Chinese Maritime and Senao International 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 Chinese Maritime with a short position of Senao International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and Senao International.
Diversification Opportunities for Chinese Maritime and Senao International
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chinese and Senao is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and Senao International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senao International and Chinese Maritime 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 Chinese Maritime Transport are associated (or correlated) with Senao International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senao International has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and Senao International go up and down completely randomly.
Pair Corralation between Chinese Maritime and Senao International
Assuming the 90 days trading horizon Chinese Maritime Transport is expected to generate 2.8 times more return on investment than Senao International. However, Chinese Maritime is 2.8 times more volatile than Senao International Co. It trades about -0.06 of its potential returns per unit of risk. Senao International Co is currently generating about -0.27 per unit of risk. If you would invest 4,290 in Chinese Maritime Transport on September 23, 2024 and sell it today you would lose (300.00) from holding Chinese Maritime Transport or give up 6.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Chinese Maritime Transport vs. Senao International Co
Performance |
Timeline |
Chinese Maritime Tra |
Senao International |
Chinese Maritime and Senao International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chinese Maritime and Senao International
The main advantage of trading using opposite Chinese Maritime and Senao International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chinese Maritime position performs unexpectedly, Senao International 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 Senao International will offset losses from the drop in Senao International's long position.Chinese Maritime vs. Yang Ming Marine | Chinese Maritime vs. Evergreen Marine Corp | Chinese Maritime vs. Eva Airways Corp | Chinese Maritime vs. U Ming Marine Transport |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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