Correlation Between COSCO SHIPPING and HAMMONIA Schiffsholding
Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and HAMMONIA Schiffsholding 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 COSCO SHIPPING and HAMMONIA Schiffsholding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSCO SHIPPING Holdings and HAMMONIA Schiffsholding AG, you can compare the effects of market volatilities on COSCO SHIPPING and HAMMONIA Schiffsholding 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 COSCO SHIPPING with a short position of HAMMONIA Schiffsholding. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and HAMMONIA Schiffsholding.
Diversification Opportunities for COSCO SHIPPING and HAMMONIA Schiffsholding
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COSCO and HAMMONIA is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Holdings and HAMMONIA Schiffsholding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAMMONIA Schiffsholding and COSCO 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 COSCO SHIPPING Holdings are associated (or correlated) with HAMMONIA Schiffsholding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAMMONIA Schiffsholding has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and HAMMONIA Schiffsholding go up and down completely randomly.
Pair Corralation between COSCO SHIPPING and HAMMONIA Schiffsholding
Assuming the 90 days horizon COSCO SHIPPING Holdings is expected to generate 3.03 times more return on investment than HAMMONIA Schiffsholding. However, COSCO SHIPPING is 3.03 times more volatile than HAMMONIA Schiffsholding AG. It trades about 0.06 of its potential returns per unit of risk. HAMMONIA Schiffsholding AG is currently generating about 0.01 per unit of risk. If you would invest 98.00 in COSCO SHIPPING Holdings on September 1, 2024 and sell it today you would earn a total of 32.00 from holding COSCO SHIPPING Holdings or generate 32.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSCO SHIPPING Holdings vs. HAMMONIA Schiffsholding AG
Performance |
| Timeline |
| COSCO SHIPPING Holdings |
| HAMMONIA Schiffsholding |
COSCO SHIPPING and HAMMONIA Schiffsholding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSCO SHIPPING and HAMMONIA Schiffsholding
The main advantage of trading using opposite COSCO SHIPPING and HAMMONIA Schiffsholding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding will offset losses from the drop in HAMMONIA Schiffsholding's long position.| COSCO SHIPPING vs. ALGOMA STEEL GROUP | COSCO SHIPPING vs. Perma Fix Environmental Services | COSCO SHIPPING vs. Harmony Gold Mining | COSCO SHIPPING vs. Reliance Steel Aluminum |
| HAMMONIA Schiffsholding vs. Qingdao Port International | HAMMONIA Schiffsholding vs. Superior Plus Corp | HAMMONIA Schiffsholding vs. NMI Holdings | HAMMONIA Schiffsholding vs. Origin Agritech |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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