Correlation Between COSCO SHIPPING and BW LPG
Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and BW LPG 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 BW LPG 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 BW LPG Limited, you can compare the effects of market volatilities on COSCO SHIPPING and BW LPG 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 BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and BW LPG.
Diversification Opportunities for COSCO SHIPPING and BW LPG
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COSCO and BWLLF is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Holdings and BW LPG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG Limited 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 BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG Limited has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and BW LPG go up and down completely randomly.
Pair Corralation between COSCO SHIPPING and BW LPG
Assuming the 90 days horizon COSCO SHIPPING Holdings is expected to generate 0.93 times more return on investment than BW LPG. However, COSCO SHIPPING Holdings is 1.08 times less risky than BW LPG. It trades about -0.03 of its potential returns per unit of risk. BW LPG Limited is currently generating about -0.17 per unit of risk. If you would invest 855.00 in COSCO SHIPPING Holdings on September 3, 2024 and sell it today you would lose (147.00) from holding COSCO SHIPPING Holdings or give up 17.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 13.6% |
| Values | Daily Returns |
COSCO SHIPPING Holdings vs. BW LPG Limited
Performance |
| Timeline |
| COSCO SHIPPING Holdings |
| BW LPG Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
COSCO SHIPPING and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSCO SHIPPING and BW LPG
The main advantage of trading using opposite COSCO SHIPPING and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, BW LPG 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 BW LPG will offset losses from the drop in BW LPG's long position.| 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 |
| BW LPG vs. Hutchison Port Holdings | BW LPG vs. Kawasaki Kisen Kaisha | BW LPG vs. MPC Container Ships | BW LPG vs. Hapag Lloyd Aktiengesellschaft |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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