Correlation Between COSCO SHIPPING and MPC Container
Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and MPC Container 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 MPC Container 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 MPC Container Ships, you can compare the effects of market volatilities on COSCO SHIPPING and MPC Container 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 MPC Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and MPC Container.
Diversification Opportunities for COSCO SHIPPING and MPC Container
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COSCO and MPC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Holdings and MPC Container Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPC Container Ships 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 MPC Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPC Container Ships has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and MPC Container go up and down completely randomly.
Pair Corralation between COSCO SHIPPING and MPC Container
Assuming the 90 days horizon COSCO SHIPPING Holdings is expected to under-perform the MPC Container. In addition to that, COSCO SHIPPING is 1.07 times more volatile than MPC Container Ships. It trades about -0.03 of its total potential returns per unit of risk. MPC Container Ships is currently generating about 0.02 per unit of volatility. If you would invest 210.00 in MPC Container Ships on August 27, 2024 and sell it today you would earn a total of 0.00 from holding MPC Container Ships or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSCO SHIPPING Holdings vs. MPC Container Ships
Performance |
| Timeline |
| COSCO SHIPPING Holdings |
| MPC Container Ships |
COSCO SHIPPING and MPC Container Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSCO SHIPPING and MPC Container
The main advantage of trading using opposite COSCO SHIPPING and MPC Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, MPC Container 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 MPC Container will offset losses from the drop in MPC Container'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 |
| MPC Container vs. AP Mller | MPC Container vs. COSCO SHIPPING Holdings | MPC Container 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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