Correlation Between Hapag-Lloyd Aktiengesellscha and MPC Container

Can any of the company-specific risk be diversified away by investing in both Hapag-Lloyd Aktiengesellscha and MPC Container 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 MPC Container 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 MPC Container Ships, you can compare the effects of market volatilities on Hapag-Lloyd Aktiengesellscha and MPC Container 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 MPC Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag-Lloyd Aktiengesellscha and MPC Container.

Diversification Opportunities for Hapag-Lloyd Aktiengesellscha and MPC Container

0.33

Correlation Coefficient

Hapag-Lloyd Aktiengesellscha  MPC Container

Weak diversification

The 3 months correlation between Hapag-Lloyd and MPC is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft and MPC Container Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPC Container Ships 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 MPC Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPC Container Ships has no effect on the direction of Hapag-Lloyd Aktiengesellscha i.e., Hapag-Lloyd Aktiengesellscha and MPC Container go up and down completely randomly.

Pair Corralation between Hapag-Lloyd Aktiengesellscha and MPC Container

Assuming the 90 days horizon Hapag Lloyd Aktiengesellschaft is expected to generate 1.22 times more return on investment than MPC Container. However, Hapag-Lloyd Aktiengesellscha is 1.22 times more volatile than MPC Container Ships. It trades about 0.02 of its potential returns per unit of risk. MPC Container Ships is currently generating about -0.05 per unit of risk. If you would invest  15,995  in Hapag Lloyd Aktiengesellschaft on December 30, 2024 and sell it today you would earn a total of  75.00  from holding Hapag Lloyd Aktiengesellschaft or generate 0.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Hapag Lloyd Aktiengesellschaft  vs.  MPC Container Ships

Hapag-Lloyd Aktiengesellscha

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hapag Lloyd Aktiengesellschaft are ranked lower than 1 (%) 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.

MPC Container Ships

Risk-Adjusted Performance

Very Weak

Over the last 90 days MPC Container Ships has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Hapag-Lloyd Aktiengesellscha and MPC Container

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

The idea behind Hapag Lloyd Aktiengesellschaft and MPC Container Ships 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.