Correlation Between Global Ship and Argo Group
Can any of the company-specific risk be diversified away by investing in both Global Ship and Argo Group 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 Global Ship and Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Argo Group International, you can compare the effects of market volatilities on Global Ship and Argo Group 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 Global Ship with a short position of Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Argo Group.
Diversification Opportunities for Global Ship and Argo Group
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Argo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Argo Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group International and Global 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 Global Ship Lease are associated (or correlated) with Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group International has no effect on the direction of Global Ship i.e., Global Ship and Argo Group go up and down completely randomly.
Pair Corralation between Global Ship and Argo Group
Assuming the 90 days trading horizon Global Ship is expected to generate 4.39 times less return on investment than Argo Group. In addition to that, Global Ship is 2.44 times more volatile than Argo Group International. It trades about 0.02 of its total potential returns per unit of risk. Argo Group International is currently generating about 0.23 per unit of volatility. If you would invest 2,478 in Argo Group International on August 28, 2024 and sell it today you would earn a total of 34.00 from holding Argo Group International or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Argo Group International
Performance |
| Timeline |
| Global Ship Lease |
| Argo Group International |
Global Ship and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Argo Group
The main advantage of trading using opposite Global Ship and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Argo Group 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 Argo Group will offset losses from the drop in Argo Group's long position.| Global Ship vs. Safe Bulkers | Global Ship vs. Diana Shipping | Global Ship vs. Costamare | Global Ship vs. Safe Bulkers |
| Argo Group vs. Loews Corp | Argo Group vs. Chubb | Argo Group vs. American Financial Group | Argo Group vs. Assurant |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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