Correlation Between Global Ship and CPU SOFTWAREHOUSE
Can any of the company-specific risk be diversified away by investing in both Global Ship and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE, you can compare the effects of market volatilities on Global Ship and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and CPU SOFTWAREHOUSE.
Diversification Opportunities for Global Ship and CPU SOFTWAREHOUSE
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and CPU is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and CPU SOFTWAREHOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPU SOFTWAREHOUSE has no effect on the direction of Global Ship i.e., Global Ship and CPU SOFTWAREHOUSE go up and down completely randomly.
Pair Corralation between Global Ship and CPU SOFTWAREHOUSE
Assuming the 90 days horizon Global Ship Lease is expected to under-perform the CPU SOFTWAREHOUSE. But the stock apears to be less risky and, when comparing its historical volatility, Global Ship Lease is 1.23 times less risky than CPU SOFTWAREHOUSE. The stock trades about -0.04 of its potential returns per unit of risk. The CPU SOFTWAREHOUSE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 94.00 in CPU SOFTWAREHOUSE on September 1, 2024 and sell it today you would earn a total of 2.00 from holding CPU SOFTWAREHOUSE or generate 2.13% 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. CPU SOFTWAREHOUSE
Performance |
| Timeline |
| Global Ship Lease |
| CPU SOFTWAREHOUSE |
Global Ship and CPU SOFTWAREHOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and CPU SOFTWAREHOUSE
The main advantage of trading using opposite Global Ship and CPU SOFTWAREHOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE will offset losses from the drop in CPU SOFTWAREHOUSE's long position.| Global Ship vs. Clarkson PLC | Global Ship vs. Wilh Wilhelmsen Holding | Global Ship vs. Superior Plus Corp | Global Ship vs. NMI Holdings |
| CPU SOFTWAREHOUSE vs. Fukuyama Transporting Co | CPU SOFTWAREHOUSE vs. Scandinavian Tobacco Group | CPU SOFTWAREHOUSE vs. BOS BETTER ONLINE | CPU SOFTWAREHOUSE vs. Gold Road Resources |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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