Correlation Between Global Ship and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Global Ship and BW OFFSHORE 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 BW OFFSHORE 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 BW OFFSHORE LTD, you can compare the effects of market volatilities on Global Ship and BW OFFSHORE 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 BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and BW OFFSHORE.
Diversification Opportunities for Global Ship and BW OFFSHORE
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and XY81 is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD 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 BW OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW OFFSHORE LTD has no effect on the direction of Global Ship i.e., Global Ship and BW OFFSHORE go up and down completely randomly.
Pair Corralation between Global Ship and BW OFFSHORE
Assuming the 90 days horizon Global Ship Lease is expected to generate 0.57 times more return on investment than BW OFFSHORE. However, Global Ship Lease is 1.75 times less risky than BW OFFSHORE. It trades about -0.04 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about -0.04 per unit of risk. If you would invest 2,079 in Global Ship Lease on September 1, 2024 and sell it today you would lose (47.00) from holding Global Ship Lease or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. BW OFFSHORE LTD
Performance |
| Timeline |
| Global Ship Lease |
| BW OFFSHORE LTD |
Global Ship and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and BW OFFSHORE
The main advantage of trading using opposite Global Ship and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, BW OFFSHORE 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 BW OFFSHORE will offset losses from the drop in BW OFFSHORE'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 |
| BW OFFSHORE vs. Zurich Insurance Group | BW OFFSHORE vs. NIPPON MEAT PACKERS | BW OFFSHORE vs. PT Indofood Sukses | BW OFFSHORE vs. JJ SNACK FOODS |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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