Correlation Between Global Ship and SEACOR Marine
Can any of the company-specific risk be diversified away by investing in both Global Ship and SEACOR Marine 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 SEACOR Marine 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 SEACOR Marine Holdings, you can compare the effects of market volatilities on Global Ship and SEACOR Marine 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 SEACOR Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and SEACOR Marine.
Diversification Opportunities for Global Ship and SEACOR Marine
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and SEACOR is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and SEACOR Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEACOR Marine Holdings 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 SEACOR Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEACOR Marine Holdings has no effect on the direction of Global Ship i.e., Global Ship and SEACOR Marine go up and down completely randomly.
Pair Corralation between Global Ship and SEACOR Marine
Assuming the 90 days trading horizon Global Ship Lease is expected to generate 0.11 times more return on investment than SEACOR Marine. However, Global Ship Lease is 8.87 times less risky than SEACOR Marine. It trades about 0.02 of its potential returns per unit of risk. SEACOR Marine Holdings is currently generating about -0.14 per unit of risk. If you would invest 2,623 in Global Ship Lease on August 28, 2024 and sell it today you would earn a total of 7.00 from holding Global Ship Lease or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. SEACOR Marine Holdings
Performance |
| Timeline |
| Global Ship Lease |
| SEACOR Marine Holdings |
Global Ship and SEACOR Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and SEACOR Marine
The main advantage of trading using opposite Global Ship and SEACOR Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, SEACOR Marine 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 SEACOR Marine will offset losses from the drop in SEACOR Marine's long position.| Global Ship vs. Safe Bulkers | Global Ship vs. Diana Shipping | Global Ship vs. Costamare | Global Ship vs. Safe Bulkers |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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