Correlation Between Global Ship and Par Pacific
Can any of the company-specific risk be diversified away by investing in both Global Ship and Par Pacific 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 Global Ship and Par Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Par Pacific Holdings, you can compare the effects of market volatilities on Global Ship and Par Pacific 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 Global Ship with a short position of Par Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Par Pacific.
Diversification Opportunities for Global Ship and Par Pacific
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Par is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Par Pacific Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Par Pacific Holdings and Global Ship 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 Global Ship Lease are associated (or correlated) with Par Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Par Pacific Holdings has no effect on the direction of Global Ship i.e., Global Ship and Par Pacific go up and down completely randomly.
Pair Corralation between Global Ship and Par Pacific
Assuming the 90 days horizon Global Ship Lease is expected to under-perform the Par Pacific. But the stock apears to be less risky and, when comparing its historical volatility, Global Ship Lease is 1.21 times less risky than Par Pacific. The stock trades about -0.13 of its potential returns per unit of risk. The Par Pacific Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,450 in Par Pacific Holdings on September 3, 2024 and sell it today you would earn a total of 180.00 from holding Par Pacific Holdings or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Par Pacific Holdings
Performance |
| Timeline |
| Global Ship Lease |
| Par Pacific Holdings |
Global Ship and Par Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Par Pacific
The main advantage of trading using opposite Global Ship and Par Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Par Pacific 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 Par Pacific will offset losses from the drop in Par Pacific's long position.| Global Ship vs. BW LPG Limited | Global Ship vs. Wilh Wilhelmsen Holding | Global Ship vs. Superior Plus Corp | Global Ship vs. NMI Holdings |
| Par Pacific vs. MAROC TELECOM | Par Pacific vs. CarsalesCom | Par Pacific vs. PACIFIC ONLINE | Par Pacific vs. Chunghwa Telecom Co |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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