Correlation Between Cool and Grindrod Shipping
Can any of the company-specific risk be diversified away by investing in both Cool and Grindrod Shipping 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 Cool and Grindrod Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cool Company and Grindrod Shipping Holdings, you can compare the effects of market volatilities on Cool and Grindrod Shipping 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 Cool with a short position of Grindrod Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cool and Grindrod Shipping.
Diversification Opportunities for Cool and Grindrod Shipping
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cool and Grindrod is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cool Company and Grindrod Shipping Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grindrod Shipping and Cool 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 Cool Company are associated (or correlated) with Grindrod Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grindrod Shipping has no effect on the direction of Cool i.e., Cool and Grindrod Shipping go up and down completely randomly.
Pair Corralation between Cool and Grindrod Shipping
If you would invest (100.00) in Grindrod Shipping Holdings on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Grindrod Shipping Holdings or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Cool Company vs. Grindrod Shipping Holdings
Performance |
| Timeline |
| Cool Company |
| Grindrod Shipping |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cool and Grindrod Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cool and Grindrod Shipping
The main advantage of trading using opposite Cool and Grindrod Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cool position performs unexpectedly, Grindrod Shipping 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 Grindrod Shipping will offset losses from the drop in Grindrod Shipping's long position.The idea behind Cool Company and Grindrod Shipping Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Grindrod Shipping vs. Star Bulk Carriers | Grindrod Shipping vs. Golden Ocean Group | Grindrod Shipping vs. Global Ship Lease | Grindrod Shipping vs. Diana Shipping |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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