Correlation Between Global Ship and Capital Clean
Can any of the company-specific risk be diversified away by investing in both Global Ship and Capital Clean 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 Capital Clean 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 Capital Clean Energy, you can compare the effects of market volatilities on Global Ship and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Capital Clean.
Diversification Opportunities for Global Ship and Capital Clean
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Capital is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Global Ship i.e., Global Ship and Capital Clean go up and down completely randomly.
Pair Corralation between Global Ship and Capital Clean
Assuming the 90 days trading horizon Global Ship is expected to generate 1.76 times less return on investment than Capital Clean. But when comparing it to its historical volatility, Global Ship Lease is 3.48 times less risky than Capital Clean. It trades about 0.08 of its potential returns per unit of risk. Capital Clean Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,761 in Capital Clean Energy on August 30, 2024 and sell it today you would earn a total of 73.00 from holding Capital Clean Energy or generate 4.15% 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. Capital Clean Energy
Performance |
| Timeline |
| Global Ship Lease |
| Capital Clean Energy |
Global Ship and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Capital Clean
The main advantage of trading using opposite Global Ship and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.| Global Ship vs. Safe Bulkers | Global Ship vs. Diana Shipping | Global Ship vs. Costamare | Global Ship vs. Safe Bulkers |
| Capital Clean vs. Mink Therapeutics | Capital Clean vs. EvoAir Holdings | Capital Clean vs. Mind Medicine | Capital Clean vs. Westinghouse Air Brake |
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 CEOs Directory module to screen CEOs from public companies around the world.
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