Correlation Between COSCO SHIPPING and DAmico International

Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and DAmico International 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 DAmico International 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 dAmico International Shipping, you can compare the effects of market volatilities on COSCO SHIPPING and DAmico International 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 DAmico International. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and DAmico International.

Diversification Opportunities for COSCO SHIPPING and DAmico International

0.54

Correlation Coefficient

COSCO SHIPPING  DAmico International

Very weak diversification

The 3 months correlation between COSCO and DAmico is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Holdings and dAmico International Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on dAmico International 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 DAmico International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of dAmico International has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and DAmico International go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and DAmico International

Assuming the 90 days horizon COSCO SHIPPING Holdings is expected to generate 1.9 times more return on investment than DAmico International. However, COSCO SHIPPING is 1.9 times more volatile than dAmico International Shipping. It trades about 0.01 of its potential returns per unit of risk. dAmico International Shipping is currently generating about 0.02 per unit of risk. If you would invest  164.00  in COSCO SHIPPING Holdings on December 25, 2024 and sell it today you would lose (4.00) from holding COSCO SHIPPING Holdings or give up 2.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

COSCO SHIPPING Holdings  vs.  dAmico International Shipping

COSCO SHIPPING Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days COSCO SHIPPING Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, COSCO SHIPPING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

dAmico International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in dAmico International Shipping are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DAmico International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with COSCO SHIPPING and DAmico International

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

The idea behind COSCO SHIPPING Holdings and dAmico International Shipping 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.