Correlation Between Empire Global and COSCO SHIPPING

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

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

Diversification Opportunities for Empire Global and COSCO SHIPPING

0.21

Correlation Coefficient

Empire Global  COSCO SHIPPING

Modest diversification

The 3 months correlation between Empire and COSCO is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Empire Global Gaming and COSCO SHIPPING Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Holdings and Empire Global 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 Empire Global Gaming are associated (or correlated) with COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Holdings has no effect on the direction of Empire Global i.e., Empire Global and COSCO SHIPPING go up and down completely randomly.

Pair Corralation between Empire Global and COSCO SHIPPING

Given the investment horizon of 90 days Empire Global Gaming is expected to generate 65.74 times more return on investment than COSCO SHIPPING. However, Empire Global is 65.74 times more volatile than COSCO SHIPPING Holdings. It trades about 0.28 of its potential returns per unit of risk. COSCO SHIPPING Holdings is currently generating about -0.01 per unit of risk. If you would invest  0.00  in Empire Global Gaming on December 28, 2024 and sell it today you would earn a total of  0.01  from holding Empire Global Gaming or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	22.81%
Values	Daily Returns

Empire Global Gaming  vs.  COSCO SHIPPING Holdings

Empire Global Gaming

Risk-Adjusted Performance

Solid

Over the last 90 days Empire Global Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unfluctuating technical and fundamental indicators, Empire Global reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Empire Global and COSCO SHIPPING

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

The idea behind Empire Global Gaming and COSCO SHIPPING 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.