Correlation Between Global Ship and Forsys Metals
Can any of the company-specific risk be diversified away by investing in both Global Ship and Forsys Metals 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 Forsys Metals 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 Forsys Metals Corp, you can compare the effects of market volatilities on Global Ship and Forsys Metals 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 Forsys Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Forsys Metals.
Diversification Opportunities for Global Ship and Forsys Metals
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Forsys is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Forsys Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forsys Metals Corp 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 Forsys Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forsys Metals Corp has no effect on the direction of Global Ship i.e., Global Ship and Forsys Metals go up and down completely randomly.
Pair Corralation between Global Ship and Forsys Metals
Assuming the 90 days horizon Global Ship Lease is expected to generate 0.19 times more return on investment than Forsys Metals. However, Global Ship Lease is 5.34 times less risky than Forsys Metals. It trades about -0.17 of its potential returns per unit of risk. Forsys Metals Corp is currently generating about -0.1 per unit of risk. If you would invest 2,202 in Global Ship Lease on November 4, 2024 and sell it today you would lose (126.00) from holding Global Ship Lease or give up 5.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Global Ship Lease vs. Forsys Metals Corp
Performance |
| Timeline |
| Global Ship Lease |
| Forsys Metals Corp |
Global Ship and Forsys Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Forsys Metals
The main advantage of trading using opposite Global Ship and Forsys Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Forsys Metals 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 Forsys Metals will offset losses from the drop in Forsys Metals' long position.| Global Ship vs. Cars Inc | Global Ship vs. Yuexiu Transport Infrastructure | Global Ship vs. Titan Machinery | Global Ship vs. Gold Road Resources |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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