Correlation Between AP Moeller and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both AP Moeller and COSCO SHIPPING 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 AP Moeller and COSCO SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Moeller and COSCO SHIPPING Development, you can compare the effects of market volatilities on AP Moeller and COSCO SHIPPING 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 AP Moeller with a short position of COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Moeller and COSCO SHIPPING.
Diversification Opportunities for AP Moeller and COSCO SHIPPING
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AMKAF and COSCO is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding AP Moeller and COSCO SHIPPING Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Devel and AP Moeller 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 AP Moeller are associated (or correlated) with COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Devel has no effect on the direction of AP Moeller i.e., AP Moeller and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between AP Moeller and COSCO SHIPPING
Assuming the 90 days horizon AP Moeller is expected to generate 5.6 times more return on investment than COSCO SHIPPING. However, AP Moeller is 5.6 times more volatile than COSCO SHIPPING Development. It trades about 0.0 of its potential returns per unit of risk. COSCO SHIPPING Development is currently generating about -0.01 per unit of risk. If you would invest 182,625 in AP Moeller on September 12, 2024 and sell it today you would lose (25,625) from holding AP Moeller or give up 14.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.64% |
| Values | Daily Returns |
AP Moeller vs. COSCO SHIPPING Development
Performance |
| Timeline |
| AP Moeller |
| COSCO SHIPPING Devel |
AP Moeller and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Moeller and COSCO SHIPPING
The main advantage of trading using opposite AP Moeller and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Moeller position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING's long position.| AP Moeller vs. Hapag Lloyd Aktiengesellschaft | AP Moeller vs. Nippon Yusen Kabushiki | AP Moeller vs. COSCO SHIPPING Holdings | AP Moeller vs. Orient Overseas International |
| COSCO SHIPPING vs. Hapag Lloyd Aktiengesellschaft | COSCO SHIPPING vs. Nippon Yusen Kabushiki | COSCO SHIPPING vs. COSCO SHIPPING Holdings | COSCO SHIPPING vs. AP Moeller |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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