Correlation Between Global Ship and TESCO PLC
Can any of the company-specific risk be diversified away by investing in both Global Ship and TESCO PLC 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 TESCO PLC 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 TESCO PLC LS 0633333, you can compare the effects of market volatilities on Global Ship and TESCO PLC 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 TESCO PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and TESCO PLC.
Diversification Opportunities for Global Ship and TESCO PLC
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and TESCO is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and TESCO PLC LS 0633333 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TESCO PLC LS 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 TESCO PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TESCO PLC LS has no effect on the direction of Global Ship i.e., Global Ship and TESCO PLC go up and down completely randomly.
Pair Corralation between Global Ship and TESCO PLC
Assuming the 90 days horizon Global Ship is expected to generate 1.41 times less return on investment than TESCO PLC. In addition to that, Global Ship is 1.13 times more volatile than TESCO PLC LS 0633333. It trades about 0.06 of its total potential returns per unit of risk. TESCO PLC LS 0633333 is currently generating about 0.09 per unit of volatility. If you would invest 227.00 in TESCO PLC LS 0633333 on September 14, 2024 and sell it today you would earn a total of 219.00 from holding TESCO PLC LS 0633333 or generate 96.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. TESCO PLC LS 0633333
Performance |
| Timeline |
| Global Ship Lease |
| TESCO PLC LS |
Global Ship and TESCO PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and TESCO PLC
The main advantage of trading using opposite Global Ship and TESCO PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, TESCO PLC 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 TESCO PLC will offset losses from the drop in TESCO PLC's 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 |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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