Correlation Between American Shipping and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both American Shipping 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 American Shipping and COSCO SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Shipping and COSCO SHIPPING Holdings, you can compare the effects of market volatilities on American Shipping 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 American Shipping with a short position of COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shipping and COSCO SHIPPING.
Diversification Opportunities for American Shipping and COSCO SHIPPING
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and COSCO is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding American Shipping and COSCO SHIPPING Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Holdings and American Shipping 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 American Shipping 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 Holdings has no effect on the direction of American Shipping i.e., American Shipping and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between American Shipping and COSCO SHIPPING
Assuming the 90 days horizon American Shipping is expected to under-perform the COSCO SHIPPING. But the otc stock apears to be less risky and, when comparing its historical volatility, American Shipping is 2.86 times less risky than COSCO SHIPPING. The otc stock trades about -0.25 of its potential returns per unit of risk. The COSCO SHIPPING Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 745.00 in COSCO SHIPPING Holdings on September 1, 2024 and sell it today you would lose (40.00) from holding COSCO SHIPPING Holdings or give up 5.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Shipping vs. COSCO SHIPPING Holdings
Performance |
| Timeline |
| American Shipping |
| COSCO SHIPPING Holdings |
American Shipping and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Shipping and COSCO SHIPPING
The main advantage of trading using opposite American Shipping and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shipping 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.| American Shipping vs. Hapag Lloyd Aktiengesellschaft | American Shipping vs. AP Moeller Maersk AS | American Shipping vs. AP Mller | American Shipping vs. COSCO SHIPPING Holdings |
| COSCO SHIPPING vs. Mitsui OSK Lines | COSCO SHIPPING vs. Hapag Lloyd Aktiengesellschaft | COSCO SHIPPING vs. AP Moeller Maersk AS | COSCO SHIPPING vs. Orient Overseas Limited |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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