Correlation Between Orient Overseas and Jinhui Shipping

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

By analyzing existing cross correlation between Orient Overseas Limited and Jinhui Shipping and, you can compare the effects of market volatilities on Orient Overseas and Jinhui 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 Orient Overseas with a short position of Jinhui Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Overseas and Jinhui Shipping.

Diversification Opportunities for Orient Overseas and Jinhui Shipping

0.66

Correlation Coefficient

Orient Overseas  Jinhui Shipping

Poor diversification

The 3 months correlation between Orient and Jinhui is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Orient Overseas Limited and Jinhui Shipping and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Shipping and Orient Overseas 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 Orient Overseas Limited are associated (or correlated) with Jinhui Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Shipping has no effect on the direction of Orient Overseas i.e., Orient Overseas and Jinhui Shipping go up and down completely randomly.

Pair Corralation between Orient Overseas and Jinhui Shipping

Assuming the 90 days trading horizon Orient Overseas Limited is expected to generate 0.96 times more return on investment than Jinhui Shipping. However, Orient Overseas Limited is 1.05 times less risky than Jinhui Shipping. It trades about 0.23 of its potential returns per unit of risk. Jinhui Shipping and is currently generating about 0.13 per unit of risk. If you would invest  1,101  in Orient Overseas Limited on April 24, 2025 and sell it today you would earn a total of  421.00  from holding Orient Overseas Limited or generate 38.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Orient Overseas Limited  vs.  Jinhui Shipping and

Orient Overseas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Orient Overseas Limited are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, Orient Overseas reported solid returns over the last few months and may actually be approaching a breakup point.

Jinhui Shipping

Risk-Adjusted Performance

OK

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

Pair Trading with Orient Overseas and Jinhui Shipping

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

The idea behind Orient Overseas Limited and Jinhui Shipping and 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.