Correlation Between American Shipping and Byggma
Can any of the company-specific risk be diversified away by investing in both American Shipping and Byggma 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 American Shipping and Byggma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Shipping and Byggma, you can compare the effects of market volatilities on American Shipping and Byggma 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 American Shipping with a short position of Byggma. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shipping and Byggma.
Diversification Opportunities for American Shipping and Byggma
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Byggma is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding American Shipping and Byggma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggma and American Shipping 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 American Shipping are associated (or correlated) with Byggma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggma has no effect on the direction of American Shipping i.e., American Shipping and Byggma go up and down completely randomly.
Pair Corralation between American Shipping and Byggma
Assuming the 90 days trading horizon American Shipping is expected to generate 1.22 times more return on investment than Byggma. However, American Shipping is 1.22 times more volatile than Byggma. It trades about 0.01 of its potential returns per unit of risk. Byggma is currently generating about -0.04 per unit of risk. If you would invest 3,293 in American Shipping on August 29, 2024 and sell it today you would lose (518.00) from holding American Shipping or give up 15.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Shipping vs. Byggma
Performance |
| Timeline |
| American Shipping |
| Byggma |
American Shipping and Byggma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Shipping and Byggma
The main advantage of trading using opposite American Shipping and Byggma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shipping position performs unexpectedly, Byggma 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 Byggma will offset losses from the drop in Byggma's long position.| American Shipping vs. Frontline | American Shipping vs. BW LPG | American Shipping vs. FLEX LNG | American Shipping vs. Dampskibsselskabet Norden AS |
| Byggma vs. AF Gruppen ASA | Byggma vs. American Shipping | Byggma vs. Arendals Fossekompani ASA | Byggma vs. Kid ASA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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