Correlation Between Pampa Energia and COSCO SHIPPING

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

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

Diversification Opportunities for Pampa Energia and COSCO SHIPPING

0.42

Correlation Coefficient

Pampa Energia  COSCO SHIPPING

Very weak diversification

The 3 months correlation between Pampa and COSCO is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Energia SA and COSCO SHIPPING Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Devel and Pampa Energia 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 Pampa Energia SA 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 Devel has no effect on the direction of Pampa Energia i.e., Pampa Energia and COSCO SHIPPING go up and down completely randomly.

Pair Corralation between Pampa Energia and COSCO SHIPPING

Considering the 90-day investment horizon Pampa Energia SA is expected to under-perform the COSCO SHIPPING. But the stock apears to be less risky and, when comparing its historical volatility, Pampa Energia SA is 3.83 times less risky than COSCO SHIPPING. The stock trades about -0.06 of its potential returns per unit of risk. The COSCO SHIPPING Development is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  11.00  in COSCO SHIPPING Development on May 18, 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	76.19%
Values	Daily Returns

Pampa Energia SA  vs.  COSCO SHIPPING Development

Pampa Energia SA

Risk-Adjusted Performance

Weakest

Over the last 90 days Pampa Energia SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

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.

Pair Trading with Pampa Energia and COSCO SHIPPING

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