Correlation Between Global Ship and Matson
Can any of the company-specific risk be diversified away by investing in both Global Ship and Matson 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 Matson 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 Matson Inc, you can compare the effects of market volatilities on Global Ship and Matson 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 Matson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Matson.
Diversification Opportunities for Global Ship and Matson
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Matson is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Matson Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matson Inc 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 Matson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matson Inc has no effect on the direction of Global Ship i.e., Global Ship and Matson go up and down completely randomly.
Pair Corralation between Global Ship and Matson
Considering the 90-day investment horizon Global Ship Lease is expected to under-perform the Matson. But the stock apears to be less risky and, when comparing its historical volatility, Global Ship Lease is 1.12 times less risky than Matson. The stock trades about -0.13 of its potential returns per unit of risk. The Matson Inc is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 13,886 in Matson Inc on November 9, 2024 and sell it today you would lose (266.00) from holding Matson Inc or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Matson Inc
Performance |
| Timeline |
| Global Ship Lease |
| Matson Inc |
Global Ship and Matson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Matson
The main advantage of trading using opposite Global Ship and Matson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Matson 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 Matson will offset losses from the drop in Matson'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 |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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