Correlation Between Orient Overseas and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Orient Overseas 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 Orient Overseas and COSCO SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Overseas International and COSCO SHIPPING Holdings, you can compare the effects of market volatilities on Orient Overseas 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 Orient Overseas with a short position of COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Overseas and COSCO SHIPPING.
Diversification Opportunities for Orient Overseas and COSCO SHIPPING
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orient and COSCO is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Orient Overseas International 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 Orient Overseas 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 Orient Overseas International 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 Orient Overseas i.e., Orient Overseas and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Orient Overseas and COSCO SHIPPING
Assuming the 90 days horizon Orient Overseas International is expected to under-perform the COSCO SHIPPING. But the pink sheet apears to be less risky and, when comparing its historical volatility, Orient Overseas International is 1.76 times less risky than COSCO SHIPPING. The pink sheet trades about -0.04 of its potential returns per unit of risk. The COSCO SHIPPING Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 140.00 in COSCO SHIPPING Holdings on August 31, 2024 and sell it today you would earn a total of 4.00 from holding COSCO SHIPPING Holdings or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Overseas International vs. COSCO SHIPPING Holdings
Performance |
| Timeline |
| Orient Overseas Inte |
| COSCO SHIPPING Holdings |
Orient Overseas and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Overseas and COSCO SHIPPING
The main advantage of trading using opposite Orient Overseas and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Overseas 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.| Orient Overseas vs. Hapag Lloyd Aktiengesellschaft | Orient Overseas vs. Hapag Lloyd Aktiengesellschaft | Orient Overseas vs. AP Moeller Maersk AS | Orient Overseas vs. AP Mller |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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