Correlation Between Global Ship and WATSCO INC
Can any of the company-specific risk be diversified away by investing in both Global Ship and WATSCO INC 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 WATSCO INC 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 WATSCO INC B, you can compare the effects of market volatilities on Global Ship and WATSCO INC 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 WATSCO INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and WATSCO INC.
Diversification Opportunities for Global Ship and WATSCO INC
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and WATSCO is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and WATSCO INC B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WATSCO INC B 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 WATSCO INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WATSCO INC B has no effect on the direction of Global Ship i.e., Global Ship and WATSCO INC go up and down completely randomly.
Pair Corralation between Global Ship and WATSCO INC
If you would invest 41,400 in WATSCO INC B on September 14, 2024 and sell it today you would earn a total of 0.00 from holding WATSCO INC B or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Global Ship Lease vs. WATSCO INC B
Performance |
| Timeline |
| Global Ship Lease |
| WATSCO INC B |
Global Ship and WATSCO INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and WATSCO INC
The main advantage of trading using opposite Global Ship and WATSCO INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, WATSCO INC 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 WATSCO INC will offset losses from the drop in WATSCO INC'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 |
| WATSCO INC vs. Sixt Leasing SE | WATSCO INC vs. Ribbon Communications | WATSCO INC vs. The Boston Beer | WATSCO INC 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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