Correlation Between DFDS AS and Global Ship
Can any of the company-specific risk be diversified away by investing in both DFDS AS 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 DFDS AS and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFDS AS and Global Ship Lease, you can compare the effects of market volatilities on DFDS AS 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 DFDS AS with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFDS AS and Global Ship.
Diversification Opportunities for DFDS AS and Global Ship
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DFDS and Global is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding DFDS AS 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 DFDS AS 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 DFDS AS 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 DFDS AS i.e., DFDS AS and Global Ship go up and down completely randomly.
Pair Corralation between DFDS AS and Global Ship
Assuming the 90 days horizon DFDS AS is expected to under-perform the Global Ship. In addition to that, DFDS AS is 3.15 times more volatile than Global Ship Lease. It trades about -0.2 of its total potential returns per unit of risk. Global Ship Lease is currently generating about -0.19 per unit of volatility. If you would invest 2,208 in Global Ship Lease on November 3, 2024 and sell it today you would lose (132.00) from holding Global Ship Lease or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
DFDS AS vs. Global Ship Lease
Performance |
| Timeline |
| DFDS AS |
| Global Ship Lease |
DFDS AS and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFDS AS and Global Ship
The main advantage of trading using opposite DFDS AS and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFDS AS 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.| DFDS AS vs. Entravision Communications | DFDS AS vs. Telecom Argentina SA | DFDS AS vs. Broadcom | DFDS AS vs. Highlight Communications AG |
| Global Ship vs. Singapore Telecommunications Limited | Global Ship vs. CRISPR Therapeutics AG | Global Ship vs. Cogent Communications Holdings | Global Ship vs. HEMISPHERE EGY |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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