Correlation Between TOP Ships and Nippon Yusen

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Can any of the company-specific risk be diversified away by investing in both TOP Ships and Nippon Yusen 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 TOP Ships and Nippon Yusen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOP Ships and Nippon Yusen Kabushiki, you can compare the effects of market volatilities on TOP Ships and Nippon Yusen 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 TOP Ships with a short position of Nippon Yusen. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOP Ships and Nippon Yusen.

Diversification Opportunities for TOP Ships and Nippon Yusen

TOPNipponDiversified AwayTOPNipponDiversified Away100%
-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between TOP and Nippon is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding TOP Ships and Nippon Yusen Kabushiki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Yusen Kabushiki and TOP Ships 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 TOP Ships are associated (or correlated) with Nippon Yusen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Yusen Kabushiki has no effect on the direction of TOP Ships i.e., TOP Ships and Nippon Yusen go up and down completely randomly.

Pair Corralation between TOP Ships and Nippon Yusen

Given the investment horizon of 90 days TOP Ships is expected to under-perform the Nippon Yusen. In addition to that, TOP Ships is 1.77 times more volatile than Nippon Yusen Kabushiki. It trades about -0.01 of its total potential returns per unit of risk. Nippon Yusen Kabushiki is currently generating about 0.04 per unit of volatility. If you would invest  520.00  in Nippon Yusen Kabushiki on November 26, 2024 and sell it today you would earn a total of  190.00  from holding Nippon Yusen Kabushiki or generate 36.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.6%
ValuesDaily Returns

TOP Ships  vs.  Nippon Yusen Kabushiki

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-10010
JavaScript chart by amCharts 3.21.15TOPS NPNYY
       Timeline  
TOP Ships 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days TOP Ships has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5.566.577.58
Nippon Yusen Kabushiki 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nippon Yusen Kabushiki are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Nippon Yusen showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb66.26.46.66.877.2

TOP Ships and Nippon Yusen Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.82-3.61-2.4-1.190.01.032.083.134.19 0.040.060.080.10
JavaScript chart by amCharts 3.21.15TOPS NPNYY
       Returns  

Pair Trading with TOP Ships and Nippon Yusen

The main advantage of trading using opposite TOP Ships and Nippon Yusen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOP Ships position performs unexpectedly, Nippon Yusen 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 Nippon Yusen will offset losses from the drop in Nippon Yusen's long position.
The idea behind TOP Ships and Nippon Yusen Kabushiki 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.
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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