Correlation Between Global Ship and DAmico International
Can any of the company-specific risk be diversified away by investing in both Global Ship and DAmico International 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 DAmico International 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 dAmico International Shipping, you can compare the effects of market volatilities on Global Ship and DAmico International 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 DAmico International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and DAmico International.
Diversification Opportunities for Global Ship and DAmico International
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and DAmico is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and dAmico International Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on dAmico International 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 DAmico International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of dAmico International has no effect on the direction of Global Ship i.e., Global Ship and DAmico International go up and down completely randomly.
Pair Corralation between Global Ship and DAmico International
Considering the 90-day investment horizon Global Ship is expected to generate 1.71 times less return on investment than DAmico International. But when comparing it to its historical volatility, Global Ship Lease is 2.28 times less risky than DAmico International. It trades about 0.06 of its potential returns per unit of risk. dAmico International Shipping is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 255.00 in dAmico International Shipping on August 28, 2024 and sell it today you would earn a total of 180.00 from holding dAmico International Shipping or generate 70.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. dAmico International Shipping
Performance |
| Timeline |
| Global Ship Lease |
| dAmico International |
Global Ship and DAmico International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and DAmico International
The main advantage of trading using opposite Global Ship and DAmico International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, DAmico International 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 DAmico International will offset losses from the drop in DAmico International's long position.| Global Ship vs. Costamare | Global Ship vs. Navios Maritime Partners | Global Ship vs. Genco Shipping Trading | Global Ship vs. Star Bulk Carriers |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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