Correlation Between MPC Container and Stolt Nielsen
Can any of the company-specific risk be diversified away by investing in both MPC Container and Stolt Nielsen 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 MPC Container and Stolt Nielsen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPC Container Ships and Stolt Nielsen Limited, you can compare the effects of market volatilities on MPC Container and Stolt Nielsen 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 MPC Container with a short position of Stolt Nielsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPC Container and Stolt Nielsen.
Diversification Opportunities for MPC Container and Stolt Nielsen
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MPC and Stolt is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding MPC Container Ships and Stolt Nielsen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stolt Nielsen Limited and MPC Container 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 MPC Container Ships are associated (or correlated) with Stolt Nielsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stolt Nielsen Limited has no effect on the direction of MPC Container i.e., MPC Container and Stolt Nielsen go up and down completely randomly.
Pair Corralation between MPC Container and Stolt Nielsen
Assuming the 90 days trading horizon MPC Container Ships is expected to generate 1.77 times more return on investment than Stolt Nielsen. However, MPC Container is 1.77 times more volatile than Stolt Nielsen Limited. It trades about 0.1 of its potential returns per unit of risk. Stolt Nielsen Limited is currently generating about -0.02 per unit of risk. If you would invest 982.00 in MPC Container Ships on September 4, 2024 and sell it today you would earn a total of 1,193 from holding MPC Container Ships or generate 121.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MPC Container Ships vs. Stolt Nielsen Limited
Performance |
| Timeline |
| MPC Container Ships |
| Stolt Nielsen Limited |
MPC Container and Stolt Nielsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPC Container and Stolt Nielsen
The main advantage of trading using opposite MPC Container and Stolt Nielsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPC Container position performs unexpectedly, Stolt Nielsen 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 Stolt Nielsen will offset losses from the drop in Stolt Nielsen's long position.| MPC Container vs. 2020 Bulkers | MPC Container vs. Belships | MPC Container vs. BW LPG | MPC Container vs. REC Silicon ASA |
| Stolt Nielsen vs. Sparebank 1 SMN | Stolt Nielsen vs. BW Offshore | Stolt Nielsen vs. Norwegian Air Shuttle | Stolt Nielsen vs. Jaeren Sparebank |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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