Correlation Between BROOKDALE and Global Ship
Can any of the company-specific risk be diversified away by investing in both BROOKDALE 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 BROOKDALE and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROOKDALE SR LIVING and Global Ship Lease, you can compare the effects of market volatilities on BROOKDALE 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 BROOKDALE with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROOKDALE and Global Ship.
Diversification Opportunities for BROOKDALE and Global Ship
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between BROOKDALE and Global is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BROOKDALE SR LIVING 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 BROOKDALE 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 BROOKDALE SR LIVING 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 BROOKDALE i.e., BROOKDALE and Global Ship go up and down completely randomly.
Pair Corralation between BROOKDALE and Global Ship
Assuming the 90 days trading horizon BROOKDALE SR LIVING is expected to under-perform the Global Ship. In addition to that, BROOKDALE is 1.8 times more volatile than Global Ship Lease. It trades about -0.05 of its total potential returns per unit of risk. Global Ship Lease is currently generating about 0.0 per unit of volatility. If you would invest 2,092 in Global Ship Lease on September 12, 2024 and sell it today you would lose (16.00) from holding Global Ship Lease or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
BROOKDALE SR LIVING vs. Global Ship Lease
Performance |
| Timeline |
| BROOKDALE SR LIVING |
| Global Ship Lease |
BROOKDALE and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROOKDALE and Global Ship
The main advantage of trading using opposite BROOKDALE and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROOKDALE 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.| BROOKDALE vs. FARO Technologies | BROOKDALE vs. DELTA AIR LINES | BROOKDALE vs. Altair Engineering | BROOKDALE vs. Digilife Technologies Limited |
| Global Ship vs. Superior Plus Corp | Global Ship vs. SIVERS SEMICONDUCTORS AB | Global Ship vs. CHINA HUARONG ENERHD 50 | Global Ship vs. NORDIC HALIBUT AS |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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