Correlation Between Dampskibsselskabet and American Shipping
Can any of the company-specific risk be diversified away by investing in both Dampskibsselskabet and American 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 Dampskibsselskabet and American Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dampskibsselskabet Norden AS and American Shipping, you can compare the effects of market volatilities on Dampskibsselskabet and American 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 Dampskibsselskabet with a short position of American Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dampskibsselskabet and American Shipping.
Diversification Opportunities for Dampskibsselskabet and American Shipping
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dampskibsselskabet and American is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dampskibsselskabet Norden AS and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping and Dampskibsselskabet 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 Dampskibsselskabet Norden AS are associated (or correlated) with American Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shipping has no effect on the direction of Dampskibsselskabet i.e., Dampskibsselskabet and American Shipping go up and down completely randomly.
Pair Corralation between Dampskibsselskabet and American Shipping
Assuming the 90 days trading horizon Dampskibsselskabet Norden AS is expected to under-perform the American Shipping. In addition to that, Dampskibsselskabet is 1.33 times more volatile than American Shipping. It trades about -0.17 of its total potential returns per unit of risk. American Shipping is currently generating about -0.03 per unit of volatility. If you would invest 2,803 in American Shipping on September 1, 2024 and sell it today you would lose (38.00) from holding American Shipping or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dampskibsselskabet Norden AS vs. American Shipping
Performance |
| Timeline |
| Dampskibsselskabet |
| American Shipping |
Dampskibsselskabet and American Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dampskibsselskabet and American Shipping
The main advantage of trading using opposite Dampskibsselskabet and American Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dampskibsselskabet position performs unexpectedly, American 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 American Shipping will offset losses from the drop in American Shipping's long position.| Dampskibsselskabet vs. NKT AS | Dampskibsselskabet vs. GN Store Nord | Dampskibsselskabet vs. ROCKWOOL International AS |
| American Shipping vs. Aker Horizons AS | American Shipping vs. REC Silicon ASA | American Shipping vs. Kongsberg Automotive Holding | American Shipping vs. Aker Carbon Capture |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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