Correlation Between Stolt Nielsen and Hapag-Lloyd Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Stolt Nielsen and Hapag-Lloyd Aktiengesellscha 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 Stolt Nielsen and Hapag-Lloyd Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stolt Nielsen Limited and Hapag Lloyd Aktiengesellschaft, you can compare the effects of market volatilities on Stolt Nielsen and Hapag-Lloyd Aktiengesellscha 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 Stolt Nielsen with a short position of Hapag-Lloyd Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stolt Nielsen and Hapag-Lloyd Aktiengesellscha.
Diversification Opportunities for Stolt Nielsen and Hapag-Lloyd Aktiengesellscha
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stolt and Hapag-Lloyd is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Stolt Nielsen Limited and Hapag Lloyd Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag-Lloyd Aktiengesellscha and Stolt Nielsen 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 Stolt Nielsen Limited are associated (or correlated) with Hapag-Lloyd Aktiengesellscha. 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 Aktiengesellscha has no effect on the direction of Stolt Nielsen i.e., Stolt Nielsen and Hapag-Lloyd Aktiengesellscha go up and down completely randomly.
Pair Corralation between Stolt Nielsen and Hapag-Lloyd Aktiengesellscha
Assuming the 90 days horizon Stolt Nielsen is expected to generate 2.7 times less return on investment than Hapag-Lloyd Aktiengesellscha. But when comparing it to its historical volatility, Stolt Nielsen Limited is 1.93 times less risky than Hapag-Lloyd Aktiengesellscha. It trades about 0.03 of its potential returns per unit of risk. Hapag Lloyd Aktiengesellschaft is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 20,030 in Hapag Lloyd Aktiengesellschaft on September 5, 2024 and sell it today you would lose (4,209) from holding Hapag Lloyd Aktiengesellschaft or give up 21.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.25% |
| Values | Daily Returns |
Stolt Nielsen Limited vs. Hapag Lloyd Aktiengesellschaft
Performance |
| Timeline |
| Stolt Nielsen Limited |
| Hapag-Lloyd Aktiengesellscha |
Stolt Nielsen and Hapag-Lloyd Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stolt Nielsen and Hapag-Lloyd Aktiengesellscha
The main advantage of trading using opposite Stolt Nielsen and Hapag-Lloyd Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stolt Nielsen position performs unexpectedly, Hapag-Lloyd Aktiengesellscha 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 Aktiengesellscha will offset losses from the drop in Hapag-Lloyd Aktiengesellscha's long position.The idea behind Stolt Nielsen Limited and Hapag Lloyd Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hapag-Lloyd Aktiengesellscha vs. COSCO SHIPPING Holdings | Hapag-Lloyd Aktiengesellscha vs. Orient Overseas Limited |
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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