Correlation Between Liaoning Port and FIRST SHIP
Can any of the company-specific risk be diversified away by investing in both Liaoning Port and FIRST 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 Liaoning Port and FIRST SHIP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liaoning Port CoLtd and FIRST SHIP LEASE, you can compare the effects of market volatilities on Liaoning Port and FIRST 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 Liaoning Port with a short position of FIRST SHIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Port and FIRST SHIP.
Diversification Opportunities for Liaoning Port and FIRST SHIP
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Liaoning and FIRST is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Port CoLtd and FIRST SHIP LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SHIP LEASE and Liaoning Port 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 Liaoning Port CoLtd are associated (or correlated) with FIRST SHIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SHIP LEASE has no effect on the direction of Liaoning Port i.e., Liaoning Port and FIRST SHIP go up and down completely randomly.
Pair Corralation between Liaoning Port and FIRST SHIP
Assuming the 90 days horizon Liaoning Port CoLtd is expected to generate 0.94 times more return on investment than FIRST SHIP. However, Liaoning Port CoLtd is 1.06 times less risky than FIRST SHIP. It trades about 0.06 of its potential returns per unit of risk. FIRST SHIP LEASE is currently generating about -0.06 per unit of risk. If you would invest 7.75 in Liaoning Port CoLtd on November 7, 2024 and sell it today you would earn a total of 0.15 from holding Liaoning Port CoLtd or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Liaoning Port CoLtd vs. FIRST SHIP LEASE
Performance |
| Timeline |
| Liaoning Port CoLtd |
| FIRST SHIP LEASE |
Liaoning Port and FIRST SHIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Port and FIRST SHIP
The main advantage of trading using opposite Liaoning Port and FIRST SHIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Port position performs unexpectedly, FIRST 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 FIRST SHIP will offset losses from the drop in FIRST SHIP's long position.| Liaoning Port vs. Solstad Offshore ASA | Liaoning Port vs. EIDESVIK OFFSHORE NK | Liaoning Port vs. Monster Beverage Corp | Liaoning Port vs. SOLSTAD OFFSHORE NK |
| FIRST SHIP vs. COSCO SHIPPING Holdings | FIRST SHIP vs. Hapag Lloyd AG | FIRST SHIP vs. Orient Overseas Limited | FIRST SHIP vs. Mitsui OSK Lines |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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