Correlation Between Hapag-Lloyd and China Merchants
Can any of the company-specific risk be diversified away by investing in both Hapag-Lloyd and China Merchants 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 Hapag-Lloyd and China Merchants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hapag Lloyd AG and China Merchants Port, you can compare the effects of market volatilities on Hapag-Lloyd and China Merchants 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 Hapag-Lloyd with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag-Lloyd and China Merchants.
Diversification Opportunities for Hapag-Lloyd and China Merchants
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hapag-Lloyd and China is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd AG and China Merchants Port in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Port and Hapag-Lloyd 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 Hapag Lloyd AG are associated (or correlated) with China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Port has no effect on the direction of Hapag-Lloyd i.e., Hapag-Lloyd and China Merchants go up and down completely randomly.
Pair Corralation between Hapag-Lloyd and China Merchants
Assuming the 90 days trading horizon Hapag-Lloyd is expected to generate 5.76 times less return on investment than China Merchants. But when comparing it to its historical volatility, Hapag Lloyd AG is 1.44 times less risky than China Merchants. It trades about 0.02 of its potential returns per unit of risk. China Merchants Port is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 24.00 in China Merchants Port on September 3, 2024 and sell it today you would earn a total of 123.00 from holding China Merchants Port or generate 512.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hapag Lloyd AG vs. China Merchants Port
Performance |
| Timeline |
| Hapag Lloyd AG |
| China Merchants Port |
Hapag-Lloyd and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hapag-Lloyd and China Merchants
The main advantage of trading using opposite Hapag-Lloyd and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag-Lloyd position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.| Hapag-Lloyd vs. Qingdao Port International | Hapag-Lloyd vs. Liaoning Port CoLtd | Hapag-Lloyd vs. Superior Plus Corp | Hapag-Lloyd vs. NMI Holdings |
| China Merchants vs. Infrastrutture Wireless Italiane | China Merchants vs. 24SEVENOFFICE GROUP AB | China Merchants vs. T MOBILE INCDL 00001 | China Merchants vs. CENTURIA OFFICE REIT |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |