Correlation Between COSCO SHIPPING and CITIC

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

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

Diversification Opportunities for COSCO SHIPPING and CITIC

0.69

Correlation Coefficient

COSCO SHIPPING  CITIC

Poor diversification

The 3 months correlation between COSCO and CITIC is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING International and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Limited 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 International are associated (or correlated) with CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Limited has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and CITIC go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and CITIC

Assuming the 90 days horizon COSCO SHIPPING is expected to generate 1.72 times less return on investment than CITIC. But when comparing it to its historical volatility, COSCO SHIPPING International is 2.41 times less risky than CITIC. It trades about 0.19 of its potential returns per unit of risk. CITIC Limited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  122.00  in CITIC Limited on May 17, 2025 and sell it today you would earn a total of  29.00  from holding CITIC Limited or generate 23.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.52%
Values	Daily Returns

COSCO SHIPPING International  vs.  CITIC Limited

COSCO SHIPPING Inter

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COSCO SHIPPING International are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, COSCO SHIPPING reported solid returns over the last few months and may actually be approaching a breakup point.

CITIC Limited

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, CITIC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COSCO SHIPPING and CITIC

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

The idea behind COSCO SHIPPING International and CITIC Limited 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.