Correlation Between Hapag Lloyd and SITC International
Can any of the company-specific risk be diversified away by investing in both Hapag Lloyd and SITC International 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 SITC International 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 SITC International Holdings, you can compare the effects of market volatilities on Hapag Lloyd and SITC International 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 SITC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag Lloyd and SITC International.
Diversification Opportunities for Hapag Lloyd and SITC International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hapag and SITC is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft and SITC International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITC International 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 SITC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITC International has no effect on the direction of Hapag Lloyd i.e., Hapag Lloyd and SITC International go up and down completely randomly.
Pair Corralation between Hapag Lloyd and SITC International
Assuming the 90 days horizon Hapag Lloyd Aktiengesellschaft is expected to under-perform the SITC International. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hapag Lloyd Aktiengesellschaft is 4.06 times less risky than SITC International. The pink sheet trades about -0.19 of its potential returns per unit of risk. The SITC International Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,659 in SITC International Holdings on August 27, 2024 and sell it today you would earn a total of 67.00 from holding SITC International Holdings or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hapag Lloyd Aktiengesellschaft vs. SITC International Holdings
Performance |
| Timeline |
| Hapag Lloyd Aktienge |
| SITC International |
Hapag Lloyd and SITC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hapag Lloyd and SITC International
The main advantage of trading using opposite Hapag Lloyd and SITC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag Lloyd position performs unexpectedly, SITC International 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 SITC International will offset losses from the drop in SITC International'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 |
| SITC International vs. Nippon Yusen Kabushiki | SITC International vs. AP Moeller | SITC International vs. Orient Overseas Limited | SITC International vs. Western Bulk Chartering |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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