Correlation Between Global Ship and LTC Properties
Can any of the company-specific risk be diversified away by investing in both Global Ship and LTC Properties 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 LTC Properties 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 LTC Properties, you can compare the effects of market volatilities on Global Ship and LTC Properties 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 LTC Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and LTC Properties.
Diversification Opportunities for Global Ship and LTC Properties
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and LTC is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and LTC Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LTC Properties 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 LTC Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LTC Properties has no effect on the direction of Global Ship i.e., Global Ship and LTC Properties go up and down completely randomly.
Pair Corralation between Global Ship and LTC Properties
Assuming the 90 days horizon Global Ship Lease is expected to generate 1.33 times more return on investment than LTC Properties. However, Global Ship is 1.33 times more volatile than LTC Properties. It trades about 0.05 of its potential returns per unit of risk. LTC Properties is currently generating about 0.06 per unit of risk. If you would invest 1,627 in Global Ship Lease on September 12, 2024 and sell it today you would earn a total of 449.00 from holding Global Ship Lease or generate 27.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. LTC Properties
Performance |
| Timeline |
| Global Ship Lease |
| LTC Properties |
Global Ship and LTC Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and LTC Properties
The main advantage of trading using opposite Global Ship and LTC Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, LTC Properties 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 LTC Properties will offset losses from the drop in LTC Properties' long position.| Global Ship vs. Superior Plus Corp | Global Ship vs. SIVERS SEMICONDUCTORS AB | Global Ship vs. CHINA HUARONG ENERHD 50 | Global Ship vs. NORDIC HALIBUT AS |
| LTC Properties vs. GLG LIFE TECH | LTC Properties vs. Global Ship Lease | LTC Properties vs. Motorcar Parts of | LTC Properties vs. CarsalesCom |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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