Correlation Between Transcontinental and COSCO SHIPPING

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

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

Diversification Opportunities for Transcontinental and COSCO SHIPPING

0.21

Correlation Coefficient

Transcontinental  COSCO SHIPPING

Modest diversification

The 3 months correlation between Transcontinental and COSCO is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental and COSCO SHIPPING International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Inter and Transcontinental 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 Transcontinental 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 Inter has no effect on the direction of Transcontinental i.e., Transcontinental and COSCO SHIPPING go up and down completely randomly.

Pair Corralation between Transcontinental and COSCO SHIPPING

Assuming the 90 days horizon Transcontinental is expected to generate 1.43 times more return on investment than COSCO SHIPPING. However, Transcontinental is 1.43 times more volatile than COSCO SHIPPING International. It trades about 0.24 of its potential returns per unit of risk. COSCO SHIPPING International is currently generating about 0.12 per unit of risk. If you would invest  1,400  in Transcontinental on September 15, 2025 and sell it today you would earn a total of  306.00  from holding Transcontinental or generate 21.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Transcontinental  vs.  COSCO SHIPPING International

Transcontinental

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Transcontinental are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Transcontinental reported solid returns over the last few months and may actually be approaching a breakup point.

COSCO SHIPPING Inter

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in COSCO SHIPPING International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, COSCO SHIPPING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Transcontinental and COSCO SHIPPING

The main advantage of trading using opposite Transcontinental and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcontinental 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 Transcontinental and COSCO SHIPPING International 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.