Correlation Between COSCO SHIPPING and Pacific Basin

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

By analyzing existing cross correlation between COSCO SHIPPING Development and Pacific Basin Shipping, you can compare the effects of market volatilities on COSCO SHIPPING and Pacific Basin 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 Pacific Basin. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and Pacific Basin.

Diversification Opportunities for COSCO SHIPPING and Pacific Basin

0.0

Correlation Coefficient

COSCO SHIPPING  Pacific Basin

Pay attention - limited upside

The 3 months correlation between COSCO and Pacific is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Development and Pacific Basin Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Basin Shipping 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 Development are associated (or correlated) with Pacific Basin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Basin Shipping has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and Pacific Basin go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and Pacific Basin

If you would invest  425.00  in Pacific Basin Shipping on December 29, 2024 and sell it today you would earn a total of  14.00  from holding Pacific Basin Shipping or generate 3.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

COSCO SHIPPING Development  vs.  Pacific Basin Shipping

COSCO SHIPPING Devel

Risk-Adjusted Performance

Very Weak

Over the last 90 days COSCO SHIPPING Development 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.

Pacific Basin Shipping

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Basin Shipping are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Pacific Basin showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COSCO SHIPPING and Pacific Basin

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

The idea behind COSCO SHIPPING Development and Pacific Basin 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.