Correlation Between Caravelle International and Nippon Yusen

Can any of the company-specific risk be diversified away by investing in both Caravelle International 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 Caravelle International and Nippon Yusen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Caravelle International Group and Nippon Yusen Kabushiki, you can compare the effects of market volatilities on Caravelle International 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 Caravelle International with a short position of Nippon Yusen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caravelle International and Nippon Yusen.

Diversification Opportunities for Caravelle International and Nippon Yusen

-0.28

Correlation Coefficient

Caravelle International  Nippon Yusen

Very good diversification

The 3 months correlation between Caravelle and Nippon is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Caravelle International Group 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 Caravelle International 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 Caravelle International Group 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 Caravelle International i.e., Caravelle International and Nippon Yusen go up and down completely randomly.

Pair Corralation between Caravelle International and Nippon Yusen

If you would invest  2,343  in Nippon Yusen Kabushiki on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Nippon Yusen Kabushiki or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Caravelle International Group  vs.  Nippon Yusen Kabushiki

Caravelle International

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Caravelle International Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unsteady fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.

Nippon Yusen Kabushiki

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nippon Yusen Kabushiki has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Nippon Yusen is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Caravelle International and Nippon Yusen

The main advantage of trading using opposite Caravelle International and Nippon Yusen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caravelle International 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 Caravelle International Group 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.