Correlation Between COSCO SHIPPING and Clarkson PLC

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Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and Clarkson PLC 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 Clarkson PLC 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 Clarkson PLC, you can compare the effects of market volatilities on COSCO SHIPPING and Clarkson PLC 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 Clarkson PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and Clarkson PLC.

Diversification Opportunities for COSCO SHIPPING and Clarkson PLC

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between COSCO and Clarkson is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Holdings and Clarkson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarkson PLC 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 Clarkson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarkson PLC has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and Clarkson PLC go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and Clarkson PLC

Assuming the 90 days horizon COSCO SHIPPING Holdings is expected to under-perform the Clarkson PLC. In addition to that, COSCO SHIPPING is 2.08 times more volatile than Clarkson PLC. It trades about -0.14 of its total potential returns per unit of risk. Clarkson PLC is currently generating about 0.31 per unit of volatility. If you would invest  4,525  in Clarkson PLC on September 4, 2024 and sell it today you would earn a total of  489.00  from holding Clarkson PLC or generate 10.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

COSCO SHIPPING Holdings  vs.  Clarkson PLC

 Performance 
       Timeline  
COSCO SHIPPING Holdings 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in COSCO SHIPPING Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, COSCO SHIPPING showed solid returns over the last few months and may actually be approaching a breakup point.
Clarkson PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Clarkson PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Clarkson PLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

COSCO SHIPPING and Clarkson PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with COSCO SHIPPING and Clarkson PLC

The main advantage of trading using opposite COSCO SHIPPING and Clarkson PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, Clarkson PLC 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 Clarkson PLC will offset losses from the drop in Clarkson PLC's long position.
The idea behind COSCO SHIPPING Holdings and Clarkson PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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