Correlation Between Hapag-Lloyd and Nippon Yusen
Can any of the company-specific risk be diversified away by investing in both Hapag-Lloyd 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 Hapag-Lloyd and Nippon Yusen 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 Nippon Yusen Kabushiki, you can compare the effects of market volatilities on Hapag-Lloyd 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 Hapag-Lloyd with a short position of Nippon Yusen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag-Lloyd and Nippon Yusen.
Diversification Opportunities for Hapag-Lloyd and Nippon Yusen
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hapag-Lloyd and Nippon is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd AG 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 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 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 Hapag-Lloyd i.e., Hapag-Lloyd and Nippon Yusen go up and down completely randomly.
Pair Corralation between Hapag-Lloyd and Nippon Yusen
Assuming the 90 days trading horizon Hapag Lloyd AG is expected to under-perform the Nippon Yusen. In addition to that, Hapag-Lloyd is 1.4 times more volatile than Nippon Yusen Kabushiki. It trades about -0.16 of its total potential returns per unit of risk. Nippon Yusen Kabushiki is currently generating about -0.12 per unit of volatility. If you would invest 3,105 in Nippon Yusen Kabushiki on October 20, 2024 and sell it today you would lose (158.00) from holding Nippon Yusen Kabushiki or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hapag Lloyd AG vs. Nippon Yusen Kabushiki
Performance |
| Timeline |
| Hapag Lloyd AG |
| Nippon Yusen Kabushiki |
Hapag-Lloyd and Nippon Yusen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hapag-Lloyd and Nippon Yusen
The main advantage of trading using opposite Hapag-Lloyd and Nippon Yusen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag-Lloyd 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.| Hapag-Lloyd vs. Nippon Yusen Kabushiki | Hapag-Lloyd vs. Orient Overseas Limited | Hapag-Lloyd vs. Mitsui OSK Lines | Hapag-Lloyd vs. Kawasaki Kisen Kaisha |
| Nippon Yusen vs. Hapag Lloyd AG | Nippon Yusen vs. Orient Overseas Limited | Nippon Yusen vs. Mitsui OSK Lines | Nippon Yusen vs. Kawasaki Kisen Kaisha |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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