Correlation Between Hutchison Port and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Hutchison Port 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 Hutchison Port and COSCO SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hutchison Port Holdings and COSCO SHIPPING Development, you can compare the effects of market volatilities on Hutchison Port 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 Hutchison Port with a short position of COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hutchison Port and COSCO SHIPPING.
Diversification Opportunities for Hutchison Port and COSCO SHIPPING
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hutchison and COSCO is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hutchison Port Holdings and COSCO SHIPPING Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Devel and Hutchison Port 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 Hutchison Port Holdings 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 Devel has no effect on the direction of Hutchison Port i.e., Hutchison Port and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Hutchison Port and COSCO SHIPPING
Assuming the 90 days horizon Hutchison Port is expected to generate 39.35 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, Hutchison Port Holdings is 7.24 times less risky than COSCO SHIPPING. It trades about 0.02 of its potential returns per unit of risk. COSCO SHIPPING Development is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 14.00 in COSCO SHIPPING Development on August 31, 2024 and sell it today you would lose (3.00) from holding COSCO SHIPPING Development or give up 21.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.21% |
| Values | Daily Returns |
Hutchison Port Holdings vs. COSCO SHIPPING Development
Performance |
| Timeline |
| Hutchison Port Holdings |
| COSCO SHIPPING Devel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hutchison Port and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hutchison Port and COSCO SHIPPING
The main advantage of trading using opposite Hutchison Port and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hutchison Port 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.| Hutchison Port vs. Kawasaki Kisen Kaisha | Hutchison Port vs. MPC Container Ships | Hutchison Port vs. Hapag Lloyd Aktiengesellschaft | Hutchison Port vs. Mitsui OSK Lines |
| COSCO SHIPPING vs. SITC International Holdings | COSCO SHIPPING vs. Orient Overseas Limited | COSCO SHIPPING vs. COSCO SHIPPING Holdings | COSCO SHIPPING vs. Pacific Basin Shipping |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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