Correlation Between International Container and COSCO SHIPPING

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

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

Diversification Opportunities for International Container and COSCO SHIPPING

-0.55

Correlation Coefficient

International Container  COSCO SHIPPING

Excellent diversification

The 3 months correlation between International and COSCO is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding International Container Termin and COSCO SHIPPING International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Inter and International Container 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 International Container Terminal 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 Inter has no effect on the direction of International Container i.e., International Container and COSCO SHIPPING go up and down completely randomly.

Pair Corralation between International Container and COSCO SHIPPING

If you would invest  0.00  in COSCO SHIPPING International on September 14, 2024 and sell it today you would earn a total of  0.00  from holding COSCO SHIPPING International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

International Container Termin  vs.  COSCO SHIPPING International

International Container

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Container Terminal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, International Container is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

COSCO SHIPPING Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COSCO SHIPPING International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, COSCO SHIPPING is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with International Container and COSCO SHIPPING

The main advantage of trading using opposite International Container and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Container 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.

The idea behind International Container Terminal and COSCO SHIPPING 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.