Correlation Between Global Ship and NORDHEALTH
Can any of the company-specific risk be diversified away by investing in both Global Ship and NORDHEALTH 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 NORDHEALTH 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 NORDHEALTH AS NK, you can compare the effects of market volatilities on Global Ship and NORDHEALTH 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 NORDHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and NORDHEALTH.
Diversification Opportunities for Global Ship and NORDHEALTH
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and NORDHEALTH is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and NORDHEALTH AS NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDHEALTH AS NK 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 NORDHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDHEALTH AS NK has no effect on the direction of Global Ship i.e., Global Ship and NORDHEALTH go up and down completely randomly.
Pair Corralation between Global Ship and NORDHEALTH
Assuming the 90 days horizon Global Ship is expected to generate 3.22 times less return on investment than NORDHEALTH. But when comparing it to its historical volatility, Global Ship Lease is 3.02 times less risky than NORDHEALTH. It trades about 0.05 of its potential returns per unit of risk. NORDHEALTH AS NK is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 174.00 in NORDHEALTH AS NK on August 31, 2024 and sell it today you would earn a total of 120.00 from holding NORDHEALTH AS NK or generate 68.97% 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. NORDHEALTH AS NK
Performance |
| Timeline |
| Global Ship Lease |
| NORDHEALTH AS NK |
Global Ship and NORDHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and NORDHEALTH
The main advantage of trading using opposite Global Ship and NORDHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, NORDHEALTH 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 NORDHEALTH will offset losses from the drop in NORDHEALTH's long position.| Global Ship vs. Coeur Mining | Global Ship vs. IMAGIN MEDICAL INC | Global Ship vs. AVITA Medical | Global Ship vs. Consolidated Communications 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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