Correlation Between Global Ship and Woolworths Group
Can any of the company-specific risk be diversified away by investing in both Global Ship and Woolworths Group 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 Woolworths Group 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 Woolworths Group Limited, you can compare the effects of market volatilities on Global Ship and Woolworths Group 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 Woolworths Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Woolworths Group.
Diversification Opportunities for Global Ship and Woolworths Group
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and Woolworths is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Woolworths Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woolworths Group 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 Woolworths Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woolworths Group has no effect on the direction of Global Ship i.e., Global Ship and Woolworths Group go up and down completely randomly.
Pair Corralation between Global Ship and Woolworths Group
Assuming the 90 days horizon Global Ship Lease is expected to under-perform the Woolworths Group. In addition to that, Global Ship is 2.31 times more volatile than Woolworths Group Limited. It trades about -0.04 of its total potential returns per unit of risk. Woolworths Group Limited is currently generating about 0.12 per unit of volatility. If you would invest 1,800 in Woolworths Group Limited on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Woolworths Group Limited or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global Ship Lease vs. Woolworths Group Limited
Performance |
| Timeline |
| Global Ship Lease |
| Woolworths Group |
Global Ship and Woolworths Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Woolworths Group
The main advantage of trading using opposite Global Ship and Woolworths Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Woolworths Group 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 Woolworths Group will offset losses from the drop in Woolworths Group'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 |
| Woolworths Group vs. EIDESVIK OFFSHORE NK | Woolworths Group vs. AM EAGLE OUTFITTERS | Woolworths Group vs. SCANDMEDICAL SOLDK 040 | Woolworths Group vs. Avanos Medical |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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