Correlation Between Global Ship and Red Branch
Can any of the company-specific risk be diversified away by investing in both Global Ship and Red Branch 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 Red Branch 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 Red Branch Technologies, you can compare the effects of market volatilities on Global Ship and Red Branch 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 Red Branch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Red Branch.
Diversification Opportunities for Global Ship and Red Branch
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Red is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Red Branch Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Branch Technologies 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 Red Branch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Branch Technologies has no effect on the direction of Global Ship i.e., Global Ship and Red Branch go up and down completely randomly.
Pair Corralation between Global Ship and Red Branch
If you would invest 0.01 in Red Branch Technologies on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Red Branch Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Red Branch Technologies
Performance |
| Timeline |
| Global Ship Lease |
| Red Branch Technologies |
Global Ship and Red Branch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Red Branch
The main advantage of trading using opposite Global Ship and Red Branch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Red Branch 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 Red Branch will offset losses from the drop in Red Branch's 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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