Correlation Between Hapag-Lloyd Aktiengesellscha and Nippon Yusen

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

Diversification Opportunities for Hapag-Lloyd Aktiengesellscha and Nippon Yusen

0.58

Correlation Coefficient

Hapag-Lloyd Aktiengesellscha  Nippon Yusen

Very weak diversification

The 3 months correlation between Hapag-Lloyd and Nippon is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft and Nippon Yusen Kabushiki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Yusen Kabushiki 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 Nippon Yusen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Yusen Kabushiki has no effect on the direction of Hapag-Lloyd Aktiengesellscha i.e., Hapag-Lloyd Aktiengesellscha and Nippon Yusen go up and down completely randomly.

Pair Corralation between Hapag-Lloyd Aktiengesellscha and Nippon Yusen

Assuming the 90 days horizon Hapag-Lloyd Aktiengesellscha is expected to generate 1.59 times less return on investment than Nippon Yusen. In addition to that, Hapag-Lloyd Aktiengesellscha is 2.06 times more volatile than Nippon Yusen Kabushiki. It trades about 0.03 of its total potential returns per unit of risk. Nippon Yusen Kabushiki is currently generating about 0.09 per unit of volatility. If you would invest  665.00  in Nippon Yusen Kabushiki on December 26, 2024 and sell it today you would earn a total of  53.00  from holding Nippon Yusen Kabushiki or generate 7.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Hapag Lloyd Aktiengesellschaft  vs.  Nippon Yusen Kabushiki

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 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.

Nippon Yusen Kabushiki

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nippon Yusen Kabushiki are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Nippon Yusen may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hapag-Lloyd Aktiengesellscha and Nippon Yusen

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

The idea behind Hapag Lloyd Aktiengesellschaft and Nippon Yusen Kabushiki 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.

Check out your portfolio center.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.