Correlation Between Global Ship and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both Global Ship and STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION, you can compare the effects of market volatilities on Global Ship and STRAYER EDUCATION 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 STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and STRAYER EDUCATION.
Diversification Opportunities for Global Ship and STRAYER EDUCATION
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and STRAYER is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION 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 STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of Global Ship i.e., Global Ship and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between Global Ship and STRAYER EDUCATION
Assuming the 90 days horizon Global Ship Lease is expected to generate 0.88 times more return on investment than STRAYER EDUCATION. However, Global Ship Lease is 1.14 times less risky than STRAYER EDUCATION. It trades about 0.04 of its potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.02 per unit of risk. If you would invest 1,535 in Global Ship Lease on October 30, 2024 and sell it today you would earn a total of 461.00 from holding Global Ship Lease or generate 30.03% 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. STRAYER EDUCATION
Performance |
| Timeline |
| Global Ship Lease |
| STRAYER EDUCATION |
Global Ship and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and STRAYER EDUCATION
The main advantage of trading using opposite Global Ship and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, STRAYER EDUCATION 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 STRAYER EDUCATION will offset losses from the drop in STRAYER EDUCATION's long position.| Global Ship vs. NorAm Drilling AS | Global Ship vs. Mitsui Chemicals | Global Ship vs. TIANDE CHEMICAL | Global Ship vs. Sekisui Chemical Co |
| STRAYER EDUCATION vs. Zoom Video Communications | STRAYER EDUCATION vs. Singapore Telecommunications Limited | STRAYER EDUCATION vs. SK TELECOM TDADR | STRAYER EDUCATION vs. QINGCI GAMES INC |
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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