Correlation Between Pacific Basin and Hapag Lloyd
Can any of the company-specific risk be diversified away by investing in both Pacific Basin and Hapag Lloyd 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 Pacific Basin and Hapag Lloyd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Basin Shipping and Hapag Lloyd Aktiengesellschaft, you can compare the effects of market volatilities on Pacific Basin and Hapag Lloyd 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 Pacific Basin with a short position of Hapag Lloyd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Basin and Hapag Lloyd.
Diversification Opportunities for Pacific Basin and Hapag Lloyd
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pacific and Hapag is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Basin Shipping and Hapag Lloyd Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag Lloyd Aktienge and Pacific Basin 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 Pacific Basin Shipping are associated (or correlated) with Hapag Lloyd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag Lloyd Aktienge has no effect on the direction of Pacific Basin i.e., Pacific Basin and Hapag Lloyd go up and down completely randomly.
Pair Corralation between Pacific Basin and Hapag Lloyd
Assuming the 90 days horizon Pacific Basin Shipping is expected to under-perform the Hapag Lloyd. In addition to that, Pacific Basin is 1.1 times more volatile than Hapag Lloyd Aktiengesellschaft. It trades about 0.0 of its total potential returns per unit of risk. Hapag Lloyd Aktiengesellschaft is currently generating about 0.06 per unit of volatility. If you would invest 5,617 in Hapag Lloyd Aktiengesellschaft on September 2, 2024 and sell it today you would earn a total of 2,533 from holding Hapag Lloyd Aktiengesellschaft or generate 45.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.16% |
| Values | Daily Returns |
Pacific Basin Shipping vs. Hapag Lloyd Aktiengesellschaft
Performance |
| Timeline |
| Pacific Basin Shipping |
| Hapag Lloyd Aktienge |
Pacific Basin and Hapag Lloyd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Basin and Hapag Lloyd
The main advantage of trading using opposite Pacific Basin and Hapag Lloyd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Basin position performs unexpectedly, Hapag Lloyd 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 Hapag Lloyd will offset losses from the drop in Hapag Lloyd's long position.| Pacific Basin vs. AP Mller | Pacific Basin vs. COSCO SHIPPING Holdings | Pacific Basin vs. Orient Overseas Limited |
| Hapag Lloyd vs. AP Moeller | Hapag Lloyd vs. Orient Overseas Limited | Hapag Lloyd vs. AP Mller | Hapag Lloyd vs. Mitsui OSK Lines |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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