Correlation Between COSCO SHIPPING and NVIDIA

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

Diversification Opportunities for COSCO SHIPPING and NVIDIA

0.51

Correlation Coefficient

COSCO SHIPPING  NVIDIA

Very weak diversification

The 3 months correlation between COSCO and NVIDIA is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Development and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA 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 NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and NVIDIA go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and NVIDIA

Assuming the 90 days horizon COSCO SHIPPING Development is expected to generate 5.88 times more return on investment than NVIDIA. However, COSCO SHIPPING is 5.88 times more volatile than NVIDIA. It trades about 0.08 of its potential returns per unit of risk. NVIDIA is currently generating about 0.3 per unit of risk. If you would invest  11.00  in COSCO SHIPPING Development on May 16, 2025 and sell it today you would earn a total of  2.00  from holding COSCO SHIPPING Development or generate 18.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	73.77%
Values	Daily Returns

COSCO SHIPPING Development  vs.  NVIDIA

COSCO SHIPPING Devel

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in COSCO SHIPPING Development are ranked lower than 6 (%) 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.

NVIDIA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, NVIDIA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COSCO SHIPPING and NVIDIA

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

The idea behind COSCO SHIPPING Development and NVIDIA 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.