Correlation Between COSCO SHIPPING and China Coal

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

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

Diversification Opportunities for COSCO SHIPPING and China Coal

0.49

Correlation Coefficient

COSCO SHIPPING  China Coal

Very weak diversification

The 3 months correlation between COSCO and China is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Development and China Coal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Coal Energy 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 Development are associated (or correlated) with China Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Coal Energy has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and China Coal go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and China Coal

Assuming the 90 days horizon COSCO SHIPPING Development is expected to generate 4.76 times more return on investment than China Coal. However, COSCO SHIPPING is 4.76 times more volatile than China Coal Energy. It trades about 0.13 of its potential returns per unit of risk. China Coal Energy is currently generating about 0.07 per unit of risk. If you would invest  11.00  in COSCO SHIPPING Development on May 19, 2025 and sell it today you would earn a total of  6.00  from holding COSCO SHIPPING Development or generate 54.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.21%
Values	Daily Returns

COSCO SHIPPING Development  vs.  China Coal Energy

COSCO SHIPPING Devel

Risk-Adjusted Performance

Fair

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

China Coal Energy

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in China Coal Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, China Coal may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with COSCO SHIPPING and China Coal

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

The idea behind COSCO SHIPPING Development and China Coal Energy 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.