Correlation Between Global Ship and AUSNUTRIA DAIRY
Can any of the company-specific risk be diversified away by investing in both Global Ship and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY, you can compare the effects of market volatilities on Global Ship and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and AUSNUTRIA DAIRY.
Diversification Opportunities for Global Ship and AUSNUTRIA DAIRY
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and AUSNUTRIA is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and AUSNUTRIA DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSNUTRIA DAIRY has no effect on the direction of Global Ship i.e., Global Ship and AUSNUTRIA DAIRY go up and down completely randomly.
Pair Corralation between Global Ship and AUSNUTRIA DAIRY
Assuming the 90 days horizon Global Ship Lease is expected to generate 0.8 times more return on investment than AUSNUTRIA DAIRY. However, Global Ship Lease is 1.25 times less risky than AUSNUTRIA DAIRY. It trades about 0.04 of its potential returns per unit of risk. AUSNUTRIA DAIRY is currently generating about -0.03 per unit of risk. If you would invest 1,564 in Global Ship Lease on November 29, 2024 and sell it today you would earn a total of 524.00 from holding Global Ship Lease or generate 33.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. AUSNUTRIA DAIRY
Performance |
| Timeline |
| Global Ship Lease |
| AUSNUTRIA DAIRY |
Global Ship and AUSNUTRIA DAIRY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and AUSNUTRIA DAIRY
The main advantage of trading using opposite Global Ship and AUSNUTRIA DAIRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY will offset losses from the drop in AUSNUTRIA DAIRY's long position.| Global Ship vs. WT OFFSHORE | Global Ship vs. SBM OFFSHORE | Global Ship vs. American Airlines Group | Global Ship vs. alstria office REIT AG |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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