Correlation Between COSCO SHIPPING and Diana Shipping
Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and Diana Shipping 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 Diana Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSCO SHIPPING Ports and Diana Shipping, you can compare the effects of market volatilities on COSCO SHIPPING and Diana Shipping 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 Diana Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and Diana Shipping.
Diversification Opportunities for COSCO SHIPPING and Diana Shipping
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COSCO and Diana is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Ports and Diana Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diana Shipping 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 Ports are associated (or correlated) with Diana Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diana Shipping has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and Diana Shipping go up and down completely randomly.
Pair Corralation between COSCO SHIPPING and Diana Shipping
Assuming the 90 days horizon COSCO SHIPPING Ports is expected to generate 6.13 times more return on investment than Diana Shipping. However, COSCO SHIPPING is 6.13 times more volatile than Diana Shipping. It trades about 0.05 of its potential returns per unit of risk. Diana Shipping is currently generating about -0.08 per unit of risk. If you would invest 61.00 in COSCO SHIPPING Ports on August 31, 2024 and sell it today you would lose (5.00) from holding COSCO SHIPPING Ports or give up 8.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.98% |
| Values | Daily Returns |
COSCO SHIPPING Ports vs. Diana Shipping
Performance |
| Timeline |
| COSCO SHIPPING Ports |
| Diana Shipping |
COSCO SHIPPING and Diana Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSCO SHIPPING and Diana Shipping
The main advantage of trading using opposite COSCO SHIPPING and Diana Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, Diana Shipping 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 Diana Shipping will offset losses from the drop in Diana Shipping's long position.| COSCO SHIPPING vs. China Merchants Port | COSCO SHIPPING vs. Diana Shipping | COSCO SHIPPING vs. ZIM Integrated Shipping |
| Diana Shipping vs. Star Bulk Carriers | Diana Shipping vs. Golden Ocean Group | Diana Shipping vs. Global Ship Lease | Diana Shipping vs. Genco Shipping Trading |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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