Correlation Between Hapag-Lloyd Aktiengesellscha and American Shipping

Can any of the company-specific risk be diversified away by investing in both Hapag-Lloyd Aktiengesellscha and American 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 Hapag-Lloyd Aktiengesellscha and American Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hapag Lloyd Aktiengesellschaft and American Shipping, you can compare the effects of market volatilities on Hapag-Lloyd Aktiengesellscha and American 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 Hapag-Lloyd Aktiengesellscha with a short position of American Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag-Lloyd Aktiengesellscha and American Shipping.

Diversification Opportunities for Hapag-Lloyd Aktiengesellscha and American Shipping

-0.18

Correlation Coefficient

Hapag-Lloyd Aktiengesellscha  American Shipping

Good diversification

The 3 months correlation between Hapag-Lloyd and American is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping and Hapag-Lloyd Aktiengesellscha 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 Aktiengesellschaft are associated (or correlated) with American Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shipping has no effect on the direction of Hapag-Lloyd Aktiengesellscha i.e., Hapag-Lloyd Aktiengesellscha and American Shipping go up and down completely randomly.

Pair Corralation between Hapag-Lloyd Aktiengesellscha and American Shipping

Assuming the 90 days horizon Hapag-Lloyd Aktiengesellscha is expected to generate 30.05 times less return on investment than American Shipping. But when comparing it to its historical volatility, Hapag Lloyd Aktiengesellschaft is 6.26 times less risky than American Shipping. It trades about 0.04 of its potential returns per unit of risk. American Shipping is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  149.00  in American Shipping on September 5, 2024 and sell it today you would earn a total of  87.00  from holding American Shipping or generate 58.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.43%
Values	Daily Returns

Hapag Lloyd Aktiengesellschaft  vs.  American Shipping

Hapag-Lloyd Aktiengesellscha

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hapag Lloyd Aktiengesellschaft are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Hapag-Lloyd Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

American Shipping

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Hapag-Lloyd Aktiengesellscha and American Shipping

The main advantage of trading using opposite Hapag-Lloyd Aktiengesellscha and American Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag-Lloyd Aktiengesellscha position performs unexpectedly, American 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 American Shipping will offset losses from the drop in American Shipping's long position.

The idea behind Hapag Lloyd Aktiengesellschaft and American 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.