Correlation Between Global Ship and UNITED UTILITIES
Can any of the company-specific risk be diversified away by investing in both Global Ship and UNITED UTILITIES 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 UNITED UTILITIES 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 UNITED UTILITIES GR, you can compare the effects of market volatilities on Global Ship and UNITED UTILITIES 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 UNITED UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and UNITED UTILITIES.
Diversification Opportunities for Global Ship and UNITED UTILITIES
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and UNITED is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and UNITED UTILITIES GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED UTILITIES 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 UNITED UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED UTILITIES has no effect on the direction of Global Ship i.e., Global Ship and UNITED UTILITIES go up and down completely randomly.
Pair Corralation between Global Ship and UNITED UTILITIES
Assuming the 90 days horizon Global Ship Lease is expected to generate 1.22 times more return on investment than UNITED UTILITIES. However, Global Ship is 1.22 times more volatile than UNITED UTILITIES GR. It trades about 0.04 of its potential returns per unit of risk. UNITED UTILITIES GR is currently generating about 0.01 per unit of risk. If you would invest 1,544 in Global Ship Lease on October 31, 2024 and sell it today you would earn a total of 462.00 from holding Global Ship Lease or generate 29.92% 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. UNITED UTILITIES GR
Performance |
| Timeline |
| Global Ship Lease |
| UNITED UTILITIES |
Global Ship and UNITED UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and UNITED UTILITIES
The main advantage of trading using opposite Global Ship and UNITED UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, UNITED UTILITIES 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 UNITED UTILITIES will offset losses from the drop in UNITED UTILITIES's long position.| Global Ship vs. Ringmetall SE | Global Ship vs. GRIFFIN MINING LTD | Global Ship vs. Calibre Mining Corp | Global Ship vs. Jacquet Metal Service |
| UNITED UTILITIES vs. Lery Seafood Group | UNITED UTILITIES vs. Nomad Foods | UNITED UTILITIES vs. Suntory Beverage Food | UNITED UTILITIES vs. Austevoll Seafood ASA |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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