Correlation Between COSCO SHIPPING and SITC International

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

Diversification Opportunities for COSCO SHIPPING and SITC International

-0.32

Correlation Coefficient

COSCO SHIPPING  SITC International

Very good diversification

The 3 months correlation between COSCO and SITC is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Development and SITC International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITC 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 Development are associated (or correlated) with SITC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITC International has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and SITC International go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and SITC International

If you would invest  219.00  in SITC International Holdings on September 3, 2024 and sell it today you would earn a total of  19.00  from holding SITC International Holdings or generate 8.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

COSCO SHIPPING Development  vs.  SITC International Holdings

COSCO SHIPPING Devel

Risk-Adjusted Performance

0 of 100

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.

SITC International

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with COSCO SHIPPING and SITC International

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

The idea behind COSCO SHIPPING Development and SITC International Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.