Correlation Between Euroseas and Global Ship
Can any of the company-specific risk be diversified away by investing in both Euroseas 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 Euroseas and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euroseas and Global Ship Lease, you can compare the effects of market volatilities on Euroseas 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 Euroseas with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euroseas and Global Ship.
Diversification Opportunities for Euroseas and Global Ship
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Euroseas and Global is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Euroseas 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 Euroseas 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 Euroseas 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 Euroseas i.e., Euroseas and Global Ship go up and down completely randomly.
Pair Corralation between Euroseas and Global Ship
Given the investment horizon of 90 days Euroseas is expected to generate 1.82 times more return on investment than Global Ship. However, Euroseas is 1.82 times more volatile than Global Ship Lease. It trades about 0.06 of its potential returns per unit of risk. Global Ship Lease is currently generating about 0.06 per unit of risk. If you would invest 2,523 in Euroseas on August 27, 2024 and sell it today you would earn a total of 1,527 from holding Euroseas or generate 60.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euroseas vs. Global Ship Lease
Performance |
| Timeline |
| Euroseas |
| Global Ship Lease |
Euroseas and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euroseas and Global Ship
The main advantage of trading using opposite Euroseas and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euroseas 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.| Euroseas vs. Star Bulk Carriers | Euroseas vs. TOP Ships | Euroseas vs. Seanergy Maritime Holdings | Euroseas vs. Performance Shipping |
| Global Ship vs. Costamare | Global Ship vs. Navios Maritime Partners | Global Ship vs. Genco Shipping Trading | Global Ship vs. Star Bulk Carriers |
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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