Correlation Between Clarkson PLC and Global Ship
Can any of the company-specific risk be diversified away by investing in both Clarkson PLC and Global Ship 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 Clarkson PLC and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clarkson PLC and Global Ship Lease, you can compare the effects of market volatilities on Clarkson PLC and Global Ship 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 Clarkson PLC with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clarkson PLC and Global Ship.
Diversification Opportunities for Clarkson PLC and Global Ship
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Clarkson and Global is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Clarkson PLC and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and Clarkson PLC 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 Clarkson PLC are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of Clarkson PLC i.e., Clarkson PLC and Global Ship go up and down completely randomly.
Pair Corralation between Clarkson PLC and Global Ship
Assuming the 90 days horizon Clarkson PLC is expected to generate 1.26 times more return on investment than Global Ship. However, Clarkson PLC is 1.26 times more volatile than Global Ship Lease. It trades about 0.24 of its potential returns per unit of risk. Global Ship Lease is currently generating about -0.04 per unit of risk. If you would invest 4,220 in Clarkson PLC on September 1, 2024 and sell it today you would earn a total of 560.00 from holding Clarkson PLC or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clarkson PLC vs. Global Ship Lease
Performance |
| Timeline |
| Clarkson PLC |
| Global Ship Lease |
Clarkson PLC and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clarkson PLC and Global Ship
The main advantage of trading using opposite Clarkson PLC and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clarkson PLC position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| Clarkson PLC vs. Wilh Wilhelmsen Holding | Clarkson PLC vs. Superior Plus Corp | Clarkson PLC vs. NMI Holdings | Clarkson PLC vs. Origin Agritech |
| Global Ship vs. Clarkson PLC | Global Ship vs. Wilh Wilhelmsen Holding | Global Ship vs. Superior Plus Corp | Global Ship vs. NMI Holdings |
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 the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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