Correlation Between COSCO SHIPPING and HAMMONIA Schiffsholding
Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSCO SHIPPING Energy and HAMMONIA Schiffsholding AG, you can compare the effects of market volatilities on COSCO SHIPPING and HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and HAMMONIA Schiffsholding.
Diversification Opportunities for COSCO SHIPPING and HAMMONIA Schiffsholding
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between COSCO and HAMMONIA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Energy and HAMMONIA Schiffsholding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAMMONIA Schiffsholding 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 Energy are associated (or correlated) with HAMMONIA Schiffsholding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAMMONIA Schiffsholding has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and HAMMONIA Schiffsholding go up and down completely randomly.
Pair Corralation between COSCO SHIPPING and HAMMONIA Schiffsholding
Assuming the 90 days trading horizon COSCO SHIPPING Energy is expected to generate 1.48 times more return on investment than HAMMONIA Schiffsholding. However, COSCO SHIPPING is 1.48 times more volatile than HAMMONIA Schiffsholding AG. It trades about 0.06 of its potential returns per unit of risk. HAMMONIA Schiffsholding AG is currently generating about 0.03 per unit of risk. If you would invest 32.00 in COSCO SHIPPING Energy on August 30, 2024 and sell it today you would earn a total of 45.00 from holding COSCO SHIPPING Energy or generate 140.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSCO SHIPPING Energy vs. HAMMONIA Schiffsholding AG
Performance |
| Timeline |
| COSCO SHIPPING Energy |
| HAMMONIA Schiffsholding |
COSCO SHIPPING and HAMMONIA Schiffsholding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSCO SHIPPING and HAMMONIA Schiffsholding
The main advantage of trading using opposite COSCO SHIPPING and HAMMONIA Schiffsholding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding will offset losses from the drop in HAMMONIA Schiffsholding's long position.| COSCO SHIPPING vs. PSI Software AG | COSCO SHIPPING vs. Magic Software Enterprises | COSCO SHIPPING vs. Fair Isaac Corp | COSCO SHIPPING vs. FORMPIPE SOFTWARE AB |
| HAMMONIA Schiffsholding vs. COSCO SHIPPING Energy | HAMMONIA Schiffsholding vs. Superior Plus Corp | HAMMONIA Schiffsholding vs. NMI Holdings | HAMMONIA Schiffsholding vs. SIVERS SEMICONDUCTORS AB |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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