Correlation Between VIRG NATL and Global Ship
Can any of the company-specific risk be diversified away by investing in both VIRG NATL and Global Ship 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 VIRG NATL and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIRG NATL BANKSH and Global Ship Lease, you can compare the effects of market volatilities on VIRG NATL and Global Ship 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 VIRG NATL with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRG NATL and Global Ship.
Diversification Opportunities for VIRG NATL and Global Ship
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VIRG and Global is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding VIRG NATL BANKSH and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and VIRG NATL 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 VIRG NATL BANKSH are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of VIRG NATL i.e., VIRG NATL and Global Ship go up and down completely randomly.
Pair Corralation between VIRG NATL and Global Ship
Assuming the 90 days horizon VIRG NATL BANKSH is expected to under-perform the Global Ship. In addition to that, VIRG NATL is 1.71 times more volatile than Global Ship Lease. It trades about -0.03 of its total potential returns per unit of risk. Global Ship Lease is currently generating about 0.01 per unit of volatility. If you would invest 2,128 in Global Ship Lease on October 18, 2024 and sell it today you would earn a total of 16.00 from holding Global Ship Lease or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIRG NATL BANKSH vs. Global Ship Lease
Performance |
| Timeline |
| VIRG NATL BANKSH |
| Global Ship Lease |
VIRG NATL and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIRG NATL and Global Ship
The main advantage of trading using opposite VIRG NATL and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIRG NATL position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| VIRG NATL vs. H2O Retailing | VIRG NATL vs. Fast Retailing Co | VIRG NATL vs. Tradeweb Markets | VIRG NATL vs. Apollo Investment Corp |
| Global Ship vs. BII Railway Transportation | Global Ship vs. USWE SPORTS AB | Global Ship vs. Yuexiu Transport Infrastructure | Global Ship vs. TITANIUM TRANSPORTGROUP |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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