Correlation Between Global Ship and BRISTOL
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By analyzing existing cross correlation between Global Ship Lease and BRISTOL MYERS SQUIBB CO, you can compare the effects of market volatilities on Global Ship and BRISTOL 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 BRISTOL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and BRISTOL.
Diversification Opportunities for Global Ship and BRISTOL
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and BRISTOL is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and BRISTOL MYERS SQUIBB CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRISTOL MYERS SQUIBB 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 BRISTOL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRISTOL MYERS SQUIBB has no effect on the direction of Global Ship i.e., Global Ship and BRISTOL go up and down completely randomly.
Pair Corralation between Global Ship and BRISTOL
Assuming the 90 days trading horizon Global Ship is expected to generate 51.84 times less return on investment than BRISTOL. But when comparing it to its historical volatility, Global Ship Lease is 63.95 times less risky than BRISTOL. It trades about 0.06 of its potential returns per unit of risk. BRISTOL MYERS SQUIBB CO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,904 in BRISTOL MYERS SQUIBB CO on September 14, 2024 and sell it today you would lose (39.00) from holding BRISTOL MYERS SQUIBB CO or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 74.09% |
| Values | Daily Returns |
Global Ship Lease vs. BRISTOL MYERS SQUIBB CO
Performance |
| Timeline |
| Global Ship Lease |
| BRISTOL MYERS SQUIBB |
Global Ship and BRISTOL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and BRISTOL
The main advantage of trading using opposite Global Ship and BRISTOL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, BRISTOL 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 BRISTOL will offset losses from the drop in BRISTOL's long position.The idea behind Global Ship Lease and BRISTOL MYERS SQUIBB CO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BRISTOL vs. United Rentals | BRISTOL vs. Global Ship Lease | BRISTOL vs. Anterix | BRISTOL vs. WiMi Hologram Cloud |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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