Correlation Between Hapag-Lloyd and Kawasaki Kisen
Can any of the company-specific risk be diversified away by investing in both Hapag-Lloyd and Kawasaki Kisen 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 Kawasaki Kisen 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 Kawasaki Kisen Kaisha, you can compare the effects of market volatilities on Hapag-Lloyd and Kawasaki Kisen 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 Kawasaki Kisen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag-Lloyd and Kawasaki Kisen.
Diversification Opportunities for Hapag-Lloyd and Kawasaki Kisen
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hapag-Lloyd and Kawasaki is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd AG and Kawasaki Kisen Kaisha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawasaki Kisen Kaisha 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 Kawasaki Kisen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawasaki Kisen Kaisha has no effect on the direction of Hapag-Lloyd i.e., Hapag-Lloyd and Kawasaki Kisen go up and down completely randomly.
Pair Corralation between Hapag-Lloyd and Kawasaki Kisen
Assuming the 90 days trading horizon Hapag Lloyd AG is expected to under-perform the Kawasaki Kisen. In addition to that, Hapag-Lloyd is 1.02 times more volatile than Kawasaki Kisen Kaisha. It trades about -0.16 of its total potential returns per unit of risk. Kawasaki Kisen Kaisha is currently generating about -0.06 per unit of volatility. If you would invest 1,305 in Kawasaki Kisen Kaisha on October 20, 2024 and sell it today you would lose (49.00) from holding Kawasaki Kisen Kaisha or give up 3.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hapag Lloyd AG vs. Kawasaki Kisen Kaisha
Performance |
| Timeline |
| Hapag Lloyd AG |
| Kawasaki Kisen Kaisha |
Hapag-Lloyd and Kawasaki Kisen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hapag-Lloyd and Kawasaki Kisen
The main advantage of trading using opposite Hapag-Lloyd and Kawasaki Kisen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag-Lloyd position performs unexpectedly, Kawasaki Kisen 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 Kawasaki Kisen will offset losses from the drop in Kawasaki Kisen's long position.| Hapag-Lloyd vs. Nippon Yusen Kabushiki | Hapag-Lloyd vs. Orient Overseas Limited | Hapag-Lloyd vs. Mitsui OSK Lines | Hapag-Lloyd vs. Kawasaki Kisen Kaisha |
| Kawasaki Kisen vs. Nippon Yusen Kabushiki | Kawasaki Kisen vs. Hapag Lloyd AG | Kawasaki Kisen vs. Orient Overseas Limited | Kawasaki Kisen vs. Mitsui OSK Lines |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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