Correlation Between COSCO SHIPPING and Nippon Yusen
Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and Nippon Yusen 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 Nippon Yusen 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 Nippon Yusen Kabushiki, you can compare the effects of market volatilities on COSCO SHIPPING and Nippon Yusen 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 Nippon Yusen. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and Nippon Yusen.
Diversification Opportunities for COSCO SHIPPING and Nippon Yusen
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COSCO and Nippon is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Holdings and Nippon Yusen Kabushiki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Yusen Kabushiki 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 Nippon Yusen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Yusen Kabushiki has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and Nippon Yusen go up and down completely randomly.
Pair Corralation between COSCO SHIPPING and Nippon Yusen
Assuming the 90 days horizon COSCO SHIPPING Holdings is expected to under-perform the Nippon Yusen. In addition to that, COSCO SHIPPING is 1.32 times more volatile than Nippon Yusen Kabushiki. It trades about -0.15 of its total potential returns per unit of risk. Nippon Yusen Kabushiki is currently generating about -0.14 per unit of volatility. If you would invest 664.00 in Nippon Yusen Kabushiki on November 2, 2024 and sell it today you would lose (38.00) from holding Nippon Yusen Kabushiki or give up 5.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSCO SHIPPING Holdings vs. Nippon Yusen Kabushiki
Performance |
| Timeline |
| COSCO SHIPPING Holdings |
| Nippon Yusen Kabushiki |
COSCO SHIPPING and Nippon Yusen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSCO SHIPPING and Nippon Yusen
The main advantage of trading using opposite COSCO SHIPPING and Nippon Yusen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, Nippon Yusen 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 Nippon Yusen will offset losses from the drop in Nippon Yusen'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 |
| Nippon Yusen vs. SITC International Holdings | Nippon Yusen vs. AP Moeller | Nippon Yusen vs. Orient Overseas Limited | Nippon Yusen 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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