Correlation Between Kirby and COSCO SHIPPING

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

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

Diversification Opportunities for Kirby and COSCO SHIPPING

0.09

Correlation Coefficient

Kirby  COSCO SHIPPING

Significant diversification

The 3 months correlation between Kirby and COSCO is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kirby 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 Kirby 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 Kirby 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 Kirby i.e., Kirby and COSCO SHIPPING go up and down completely randomly.

Pair Corralation between Kirby and COSCO SHIPPING

Considering the 90-day investment horizon Kirby is expected to generate 4.01 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, Kirby is 4.14 times less risky than COSCO SHIPPING. It trades about 0.08 of its potential returns per unit of risk. COSCO SHIPPING International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  26.00  in COSCO SHIPPING International on September 14, 2024 and sell it today you would earn a total of  20.00  from holding COSCO SHIPPING International or generate 76.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	39.07%
Values	Daily Returns

Kirby  vs.  COSCO SHIPPING International

Kirby

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kirby has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Kirby is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 Kirby and COSCO SHIPPING

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

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.