Correlation Between Global Ship and NH Foods
Can any of the company-specific risk be diversified away by investing in both Global Ship and NH Foods 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 NH Foods 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 NH Foods Ltd, you can compare the effects of market volatilities on Global Ship and NH Foods 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 NH Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and NH Foods.
Diversification Opportunities for Global Ship and NH Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and NIPMY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and NH Foods Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Foods 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 NH Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Foods has no effect on the direction of Global Ship i.e., Global Ship and NH Foods go up and down completely randomly.
Pair Corralation between Global Ship and NH Foods
Assuming the 90 days trading horizon Global Ship Lease is expected to generate 1.91 times more return on investment than NH Foods. However, Global Ship is 1.91 times more volatile than NH Foods Ltd. It trades about 0.05 of its potential returns per unit of risk. NH Foods Ltd is currently generating about 0.07 per unit of risk. If you would invest 2,294 in Global Ship Lease on August 28, 2024 and sell it today you would earn a total of 336.00 from holding Global Ship Lease or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Global Ship Lease vs. NH Foods Ltd
Performance |
| Timeline |
| Global Ship Lease |
| NH Foods |
Global Ship and NH Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and NH Foods
The main advantage of trading using opposite Global Ship and NH Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, NH Foods 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 NH Foods will offset losses from the drop in NH Foods' long position.| Global Ship vs. Safe Bulkers | Global Ship vs. Diana Shipping | Global Ship vs. Costamare | Global Ship vs. Safe Bulkers |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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