Correlation Between Hapag Lloyd and Mitsui OSK

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Can any of the company-specific risk be diversified away by investing in both Hapag Lloyd and Mitsui OSK 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 Hapag Lloyd and Mitsui OSK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hapag Lloyd AG and Mitsui OSK Lines, you can compare the effects of market volatilities on Hapag Lloyd and Mitsui OSK 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 Hapag Lloyd with a short position of Mitsui OSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag Lloyd and Mitsui OSK.

Diversification Opportunities for Hapag Lloyd and Mitsui OSK

HapagMitsuiDiversified AwayHapagMitsuiDiversified Away100%
0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hapag and Mitsui is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd AG and Mitsui OSK Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui OSK Lines and Hapag Lloyd 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 Hapag Lloyd AG are associated (or correlated) with Mitsui OSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui OSK Lines has no effect on the direction of Hapag Lloyd i.e., Hapag Lloyd and Mitsui OSK go up and down completely randomly.

Pair Corralation between Hapag Lloyd and Mitsui OSK

Assuming the 90 days trading horizon Hapag Lloyd AG is expected to generate 1.31 times more return on investment than Mitsui OSK. However, Hapag Lloyd is 1.31 times more volatile than Mitsui OSK Lines. It trades about 0.35 of its potential returns per unit of risk. Mitsui OSK Lines is currently generating about 0.4 per unit of risk. If you would invest  13,340  in Hapag Lloyd AG on November 21, 2024 and sell it today you would earn a total of  1,650  from holding Hapag Lloyd AG or generate 12.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hapag Lloyd AG  vs.  Mitsui OSK Lines

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15HLAG MILA
       Timeline  
Hapag Lloyd AG 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Hapag Lloyd AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hapag Lloyd is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb130135140145150155160
Mitsui OSK Lines 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Mitsui OSK Lines are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Mitsui OSK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb30.53131.53232.53333.53434.5

Hapag Lloyd and Mitsui OSK Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.79-2.84-1.89-0.930.00.931.862.793.72 0.050.060.070.080.090.100.11
JavaScript chart by amCharts 3.21.15HLAG MILA
       Returns  

Pair Trading with Hapag Lloyd and Mitsui OSK

The main advantage of trading using opposite Hapag Lloyd and Mitsui OSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag Lloyd position performs unexpectedly, Mitsui OSK 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 Mitsui OSK will offset losses from the drop in Mitsui OSK's long position.
The idea behind Hapag Lloyd AG and Mitsui OSK Lines 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 Managers module to screen money managers from public funds and ETFs managed around the world.

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