Correlation Between Hapag Lloyd and BW LPG
Can any of the company-specific risk be diversified away by investing in both Hapag Lloyd and BW LPG 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 BW LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hapag Lloyd Aktiengesellschaft and BW LPG Limited, you can compare the effects of market volatilities on Hapag Lloyd and BW LPG 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 BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag Lloyd and BW LPG.
Diversification Opportunities for Hapag Lloyd and BW LPG
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hapag and BWLLF is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft and BW LPG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG Limited 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 Aktiengesellschaft are associated (or correlated) with BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG Limited has no effect on the direction of Hapag Lloyd i.e., Hapag Lloyd and BW LPG go up and down completely randomly.
Pair Corralation between Hapag Lloyd and BW LPG
Assuming the 90 days horizon Hapag Lloyd is expected to generate 1.39 times less return on investment than BW LPG. In addition to that, Hapag Lloyd is 1.07 times more volatile than BW LPG Limited. It trades about 0.06 of its total potential returns per unit of risk. BW LPG Limited is currently generating about 0.09 per unit of volatility. If you would invest 1,309 in BW LPG Limited on September 2, 2024 and sell it today you would earn a total of 532.00 from holding BW LPG Limited or generate 40.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 56.45% |
| Values | Daily Returns |
Hapag Lloyd Aktiengesellschaft vs. BW LPG Limited
Performance |
| Timeline |
| Hapag Lloyd Aktienge |
| BW LPG Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hapag Lloyd and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hapag Lloyd and BW LPG
The main advantage of trading using opposite Hapag Lloyd and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag Lloyd position performs unexpectedly, BW LPG 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 BW LPG will offset losses from the drop in BW LPG's long position.| Hapag Lloyd vs. AP Moeller | Hapag Lloyd vs. Orient Overseas Limited | Hapag Lloyd vs. AP Mller | Hapag Lloyd vs. Mitsui OSK Lines |
| BW LPG vs. Hutchison Port Holdings | BW LPG vs. Kawasaki Kisen Kaisha | BW LPG vs. MPC Container Ships | BW LPG vs. Hapag Lloyd Aktiengesellschaft |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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