Correlation Between First Ship and Placer Creek
Can any of the company-specific risk be diversified away by investing in both First Ship and Placer Creek 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 First Ship and Placer Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ship Lease and Placer Creek Mining, you can compare the effects of market volatilities on First Ship and Placer Creek 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 First Ship with a short position of Placer Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and Placer Creek.
Diversification Opportunities for First Ship and Placer Creek
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between First and Placer is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease and Placer Creek Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Placer Creek Mining and First Ship 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 First Ship Lease are associated (or correlated) with Placer Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Placer Creek Mining has no effect on the direction of First Ship i.e., First Ship and Placer Creek go up and down completely randomly.
Pair Corralation between First Ship and Placer Creek
If you would invest 2.50 in First Ship Lease on September 1, 2024 and sell it today you would earn a total of 1.50 from holding First Ship Lease or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
First Ship Lease vs. Placer Creek Mining
Performance |
| Timeline |
| First Ship Lease |
| Placer Creek Mining |
First Ship and Placer Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ship and Placer Creek
The main advantage of trading using opposite First Ship and Placer Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship position performs unexpectedly, Placer Creek 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 Placer Creek will offset losses from the drop in Placer Creek's long position.| First Ship vs. WiMi Hologram Cloud | First Ship vs. Summit Materials | First Ship vs. Asure Software | First Ship vs. Casio Computer Co |
| Placer Creek vs. ATT Inc | Placer Creek vs. Merck Company | Placer Creek vs. Walt Disney | Placer Creek vs. Caterpillar |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |