Correlation Between BW LPG and Hapag Lloyd
Can any of the company-specific risk be diversified away by investing in both BW LPG and Hapag Lloyd 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 BW LPG and Hapag Lloyd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW LPG and Hapag Lloyd Aktiengesellschaft, you can compare the effects of market volatilities on BW LPG and Hapag Lloyd 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 BW LPG with a short position of Hapag Lloyd. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW LPG and Hapag Lloyd.
Diversification Opportunities for BW LPG and Hapag Lloyd
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BWLLY and Hapag is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding BW LPG and Hapag Lloyd Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag Lloyd Aktienge and BW LPG 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 BW LPG are associated (or correlated) with Hapag Lloyd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag Lloyd Aktienge has no effect on the direction of BW LPG i.e., BW LPG and Hapag Lloyd go up and down completely randomly.
Pair Corralation between BW LPG and Hapag Lloyd
Assuming the 90 days horizon BW LPG is expected to generate 1.77 times more return on investment than Hapag Lloyd. However, BW LPG is 1.77 times more volatile than Hapag Lloyd Aktiengesellschaft. It trades about 0.07 of its potential returns per unit of risk. Hapag Lloyd Aktiengesellschaft is currently generating about 0.03 per unit of risk. If you would invest 868.00 in BW LPG on September 2, 2024 and sell it today you would earn a total of 686.00 from holding BW LPG or generate 79.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.86% |
| Values | Daily Returns |
BW LPG vs. Hapag Lloyd Aktiengesellschaft
Performance |
| Timeline |
| BW LPG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hapag Lloyd Aktienge |
BW LPG and Hapag Lloyd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW LPG and Hapag Lloyd
The main advantage of trading using opposite BW LPG and Hapag Lloyd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW LPG position performs unexpectedly, Hapag Lloyd 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 Hapag Lloyd will offset losses from the drop in Hapag Lloyd's long position.| BW LPG vs. Kawasaki Kisen Kaisha | BW LPG vs. Pacific Basin Shipping | BW LPG vs. Hapag Lloyd Aktiengesellschaft | BW LPG vs. Hapag Lloyd Aktiengesellschaft |
| Hapag Lloyd vs. AP Moeller | Hapag Lloyd vs. Orient Overseas Limited | Hapag Lloyd vs. AP Mller | Hapag Lloyd vs. Mitsui OSK Lines |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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