Correlation Between Acme United and Global Ship
Can any of the company-specific risk be diversified away by investing in both Acme United 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 Acme United and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acme United and Global Ship Lease, you can compare the effects of market volatilities on Acme United 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 Acme United with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acme United and Global Ship.
Diversification Opportunities for Acme United and Global Ship
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acme and Global is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Acme United 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 Acme United 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 Acme United 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 Acme United i.e., Acme United and Global Ship go up and down completely randomly.
Pair Corralation between Acme United and Global Ship
Considering the 90-day investment horizon Acme United is expected to generate 2.91 times more return on investment than Global Ship. However, Acme United is 2.91 times more volatile than Global Ship Lease. It trades about 0.26 of its potential returns per unit of risk. Global Ship Lease is currently generating about 0.02 per unit of risk. If you would invest 4,050 in Acme United on August 28, 2024 and sell it today you would earn a total of 425.00 from holding Acme United or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Acme United vs. Global Ship Lease
Performance |
| Timeline |
| Acme United |
| Global Ship Lease |
Acme United and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acme United and Global Ship
The main advantage of trading using opposite Acme United and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acme United 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.| Acme United vs. Mannatech Incorporated | Acme United vs. Inter Parfums | Acme United vs. Nu Skin Enterprises | Acme United vs. Procter Gamble |
| Global Ship vs. Safe Bulkers | Global Ship vs. Diana Shipping | Global Ship vs. Costamare | Global Ship vs. Safe Bulkers |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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