Correlation Between Global Ship and Origin Energy
Can any of the company-specific risk be diversified away by investing in both Global Ship and Origin Energy 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 Origin Energy 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 Origin Energy Limited, you can compare the effects of market volatilities on Global Ship and Origin Energy 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 Origin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Origin Energy.
Diversification Opportunities for Global Ship and Origin Energy
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Origin is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Origin Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy Limited 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 Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy Limited has no effect on the direction of Global Ship i.e., Global Ship and Origin Energy go up and down completely randomly.
Pair Corralation between Global Ship and Origin Energy
Assuming the 90 days horizon Global Ship Lease is expected to under-perform the Origin Energy. In addition to that, Global Ship is 1.61 times more volatile than Origin Energy Limited. It trades about -0.04 of its total potential returns per unit of risk. Origin Energy Limited is currently generating about 0.53 per unit of volatility. If you would invest 570.00 in Origin Energy Limited on September 1, 2024 and sell it today you would earn a total of 85.00 from holding Origin Energy Limited or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Origin Energy Limited
Performance |
| Timeline |
| Global Ship Lease |
| Origin Energy Limited |
Global Ship and Origin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Origin Energy
The main advantage of trading using opposite Global Ship and Origin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Origin Energy 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 Origin Energy will offset losses from the drop in Origin Energy'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 |
| Origin Energy vs. RYU Apparel | Origin Energy vs. SBA Communications Corp | Origin Energy vs. Air Lease | Origin Energy vs. Global Ship Lease |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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