Correlation Between COSCO SHIPPING and Qingdao Port

Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and Qingdao Port 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 COSCO SHIPPING and Qingdao Port into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COSCO SHIPPING Energy and Qingdao Port International, you can compare the effects of market volatilities on COSCO SHIPPING and Qingdao Port 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 COSCO SHIPPING with a short position of Qingdao Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and Qingdao Port.

Diversification Opportunities for COSCO SHIPPING and Qingdao Port

0.45

Correlation Coefficient

COSCO SHIPPING  Qingdao Port

Very weak diversification

The 3 months correlation between COSCO and Qingdao is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Energy and Qingdao Port International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Port Interna and COSCO SHIPPING 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 COSCO SHIPPING Energy are associated (or correlated) with Qingdao Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Port Interna has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and Qingdao Port go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and Qingdao Port

Assuming the 90 days trading horizon COSCO SHIPPING Energy is expected to under-perform the Qingdao Port. But the stock apears to be less risky and, when comparing its historical volatility, COSCO SHIPPING Energy is 1.48 times less risky than Qingdao Port. The stock trades about -0.21 of its potential returns per unit of risk. The Qingdao Port International is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  66.00  in Qingdao Port International on September 23, 2024 and sell it today you would earn a total of  6.00  from holding Qingdao Port International or generate 9.09% return on investment over 90 days.

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

COSCO SHIPPING Energy  vs.  Qingdao Port International

COSCO SHIPPING Energy

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COSCO SHIPPING Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, COSCO SHIPPING reported solid returns over the last few months and may actually be approaching a breakup point.

Qingdao Port Interna

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Qingdao Port International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Qingdao Port reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COSCO SHIPPING and Qingdao Port

The main advantage of trading using opposite COSCO SHIPPING and Qingdao Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, Qingdao Port 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 Qingdao Port will offset losses from the drop in Qingdao Port's long position.

The idea behind COSCO SHIPPING Energy and Qingdao Port International 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 CEOs Directory module to screen CEOs from public companies around the world.