Correlation Between COSCO SHIPPING and HAMMONIA Schiffsholding

Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and HAMMONIA Schiffsholding 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 COSCO SHIPPING and HAMMONIA Schiffsholding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COSCO SHIPPING Holdings and HAMMONIA Schiffsholding AG, you can compare the effects of market volatilities on COSCO SHIPPING and HAMMONIA Schiffsholding 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 COSCO SHIPPING with a short position of HAMMONIA Schiffsholding. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and HAMMONIA Schiffsholding.

Diversification Opportunities for COSCO SHIPPING and HAMMONIA Schiffsholding

-0.23

Correlation Coefficient

COSCO SHIPPING  HAMMONIA Schiffsholding

Very good diversification

The 3 months correlation between COSCO and HAMMONIA is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Holdings and HAMMONIA Schiffsholding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAMMONIA Schiffsholding and COSCO SHIPPING 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 COSCO SHIPPING Holdings are associated (or correlated) with HAMMONIA Schiffsholding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAMMONIA Schiffsholding has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and HAMMONIA Schiffsholding go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and HAMMONIA Schiffsholding

Assuming the 90 days horizon COSCO SHIPPING Holdings is expected to generate 0.84 times more return on investment than HAMMONIA Schiffsholding. However, COSCO SHIPPING Holdings is 1.19 times less risky than HAMMONIA Schiffsholding. It trades about 0.09 of its potential returns per unit of risk. HAMMONIA Schiffsholding AG is currently generating about 0.06 per unit of risk. If you would invest  143.00  in COSCO SHIPPING Holdings on October 13, 2024 and sell it today you would earn a total of  5.00  from holding COSCO SHIPPING Holdings or generate 3.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

COSCO SHIPPING Holdings  vs.  HAMMONIA Schiffsholding AG

COSCO SHIPPING Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COSCO SHIPPING Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COSCO SHIPPING may actually be approaching a critical reversion point that can send shares even higher in February 2025.

HAMMONIA Schiffsholding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HAMMONIA Schiffsholding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, HAMMONIA Schiffsholding is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with COSCO SHIPPING and HAMMONIA Schiffsholding

The main advantage of trading using opposite COSCO SHIPPING and HAMMONIA Schiffsholding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding will offset losses from the drop in HAMMONIA Schiffsholding's long position.

The idea behind COSCO SHIPPING Holdings and HAMMONIA Schiffsholding AG 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.