Correlation Between Hapag Lloyd and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Hapag Lloyd and COSCO SHIPPING 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 COSCO SHIPPING 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 COSCO SHIPPING Holdings, you can compare the effects of market volatilities on Hapag Lloyd and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag Lloyd and COSCO SHIPPING.
Diversification Opportunities for Hapag Lloyd and COSCO SHIPPING
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hapag and COSCO is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft and COSCO SHIPPING Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Holdings 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Holdings has no effect on the direction of Hapag Lloyd i.e., Hapag Lloyd and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Hapag Lloyd and COSCO SHIPPING
Assuming the 90 days horizon Hapag Lloyd is expected to generate 3.23 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, Hapag Lloyd Aktiengesellschaft is 1.48 times less risky than COSCO SHIPPING. It trades about 0.04 of its potential returns per unit of risk. COSCO SHIPPING Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 120.00 in COSCO SHIPPING Holdings on September 2, 2024 and sell it today you would earn a total of 24.00 from holding COSCO SHIPPING Holdings or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Hapag Lloyd Aktiengesellschaft vs. COSCO SHIPPING Holdings
Performance |
| Timeline |
| Hapag Lloyd Aktienge |
| COSCO SHIPPING Holdings |
Hapag Lloyd and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hapag Lloyd and COSCO SHIPPING
The main advantage of trading using opposite Hapag Lloyd and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag Lloyd position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING'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 |
| COSCO SHIPPING vs. SITC International Holdings | COSCO SHIPPING vs. Orient Overseas Limited | COSCO SHIPPING vs. Pacific Basin Shipping | COSCO SHIPPING vs. SITC International Holdings |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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