Correlation Between COSCO SHIPPING and Mitsui OSK

Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and Mitsui OSK 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 Mitsui OSK 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 Mitsui OSK Lines, you can compare the effects of market volatilities on COSCO SHIPPING and Mitsui OSK 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 Mitsui OSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and Mitsui OSK.

Diversification Opportunities for COSCO SHIPPING and Mitsui OSK

0.26

Correlation Coefficient

COSCO SHIPPING  Mitsui OSK

Modest diversification

The 3 months correlation between COSCO and Mitsui is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Development and Mitsui OSK Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui OSK Lines 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 Mitsui OSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui OSK Lines has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and Mitsui OSK go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and Mitsui OSK

Assuming the 90 days horizon COSCO SHIPPING Development is expected to generate 8.95 times more return on investment than Mitsui OSK. However, COSCO SHIPPING is 8.95 times more volatile than Mitsui OSK Lines. It trades about 0.15 of its potential returns per unit of risk. Mitsui OSK Lines is currently generating about -0.04 per unit of risk. If you would invest  10.00  in COSCO SHIPPING Development on May 20, 2025 and sell it today you would earn a total of  7.00  from holding COSCO SHIPPING Development or generate 70.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	75.81%
Values	Daily Returns

COSCO SHIPPING Development  vs.  Mitsui OSK Lines

COSCO SHIPPING Devel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COSCO SHIPPING Development are ranked lower than 11 (%) 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.

Mitsui OSK Lines

Risk-Adjusted Performance

Weakest

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

Pair Trading with COSCO SHIPPING and Mitsui OSK

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

The idea behind COSCO SHIPPING Development and Mitsui OSK Lines 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.