Correlation Between Nippon Yusen and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Nippon Yusen 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 Nippon Yusen and COSCO SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Yusen Kabushiki and COSCO SHIPPING Energy, you can compare the effects of market volatilities on Nippon Yusen 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 Nippon Yusen with a short position of COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Yusen and COSCO SHIPPING.
Diversification Opportunities for Nippon Yusen and COSCO SHIPPING
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nippon and COSCO is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Yusen Kabushiki and COSCO SHIPPING Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Energy and Nippon Yusen 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 Nippon Yusen Kabushiki 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 Energy has no effect on the direction of Nippon Yusen i.e., Nippon Yusen and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Nippon Yusen and COSCO SHIPPING
Assuming the 90 days trading horizon Nippon Yusen is expected to generate 3.21 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, Nippon Yusen Kabushiki is 2.28 times less risky than COSCO SHIPPING. It trades about 0.05 of its potential returns per unit of risk. COSCO SHIPPING Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 55.00 in COSCO SHIPPING Energy on September 26, 2024 and sell it today you would earn a total of 21.00 from holding COSCO SHIPPING Energy or generate 38.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nippon Yusen Kabushiki vs. COSCO SHIPPING Energy
Performance |
Timeline |
Nippon Yusen Kabushiki |
COSCO SHIPPING Energy |
Nippon Yusen and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nippon Yusen and COSCO SHIPPING
The main advantage of trading using opposite Nippon Yusen and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Yusen 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.Nippon Yusen vs. COSCO SHIPPING Holdings | Nippon Yusen vs. Hapag Lloyd AG | Nippon Yusen vs. Orient Overseas Limited | Nippon Yusen vs. COSCO SHIPPING Energy |
COSCO SHIPPING vs. COSCO SHIPPING Holdings | COSCO SHIPPING vs. Nippon Yusen Kabushiki | COSCO SHIPPING vs. Hapag Lloyd AG | COSCO SHIPPING vs. Orient Overseas Limited |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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