Correlation Between COSCO SHIPPING and SSC Technologies

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Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and SSC Technologies 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 SSC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSCO SHIPPING HOLDINGS and SSC Technologies, you can compare the effects of market volatilities on COSCO SHIPPING and SSC Technologies 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 SSC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and SSC Technologies.

Diversification Opportunities for COSCO SHIPPING and SSC Technologies

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between COSCO and SSC Technologies is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING HOLDINGS and SSC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies 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 HOLDINGS are associated (or correlated) with SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and SSC Technologies go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and SSC Technologies

Assuming the 90 days trading horizon COSCO SHIPPING HOLDINGS is expected to under-perform the SSC Technologies. In addition to that, COSCO SHIPPING is 2.48 times more volatile than SSC Technologies. It trades about -0.04 of its total potential returns per unit of risk. SSC Technologies is currently generating about -0.04 per unit of volatility. If you would invest  7,267  in SSC Technologies on April 6, 2022 and sell it today you would lose (1,343)  from holding SSC Technologies or give up 18.48% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy77.42%
ValuesDaily Returns

COSCO SHIPPING HOLDINGS  vs.  SSC Technologies

 Performance (%) 
      Timeline 
COSCO SHIPPING HOLDINGS 
COSCO Performance
0 of 100
Over the last 90 days COSCO SHIPPING HOLDINGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, COSCO SHIPPING is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

COSCO Price Channel

SSC Technologies 
SSC Technologies Performance
0 of 100
Over the last 90 days SSC Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0136
Payout Ratio
0.15
Last Split Factor
2:1
Forward Annual Dividend Rate
0.8
Dividend Date
2022-06-15
Ex Dividend Date
2022-05-31
Last Split Date
2016-06-27

SSC Technologies Price Channel

COSCO SHIPPING and SSC Technologies Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with COSCO SHIPPING and SSC Technologies

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

COSCO SHIPPING HOLDINGS

Pair trading matchups for COSCO SHIPPING

Dupont Denemours vs. COSCO SHIPPING
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Chemocentryx vs. COSCO SHIPPING
Kimball Electrnc vs. COSCO SHIPPING
Kura Oncology vs. COSCO SHIPPING
Definitive Healthcare vs. COSCO SHIPPING
Citigroup vs. COSCO SHIPPING
Vmware vs. COSCO SHIPPING
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against COSCO SHIPPING as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. COSCO SHIPPING's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, COSCO SHIPPING's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to COSCO SHIPPING HOLDINGS.
The idea behind COSCO SHIPPING HOLDINGS and SSC Technologies 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.

SSC Technologies

Pair trading matchups for SSC Technologies

Check out your portfolio center. 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 Probability Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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