Correlation Between Global Ship and Star Bulk
Can any of the company-specific risk be diversified away by investing in both Global Ship and Star Bulk 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 Star Bulk 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 Star Bulk Carriers, you can compare the effects of market volatilities on Global Ship and Star Bulk 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 Star Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Star Bulk.
Diversification Opportunities for Global Ship and Star Bulk
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Star is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Star Bulk Carriers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Bulk Carriers 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 Star Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Bulk Carriers has no effect on the direction of Global Ship i.e., Global Ship and Star Bulk go up and down completely randomly.
Pair Corralation between Global Ship and Star Bulk
Considering the 90-day investment horizon Global Ship Lease is expected to under-perform the Star Bulk. In addition to that, Global Ship is 1.09 times more volatile than Star Bulk Carriers. It trades about -0.11 of its total potential returns per unit of risk. Star Bulk Carriers is currently generating about -0.07 per unit of volatility. If you would invest 1,920 in Star Bulk Carriers on August 24, 2024 and sell it today you would lose (57.00) from holding Star Bulk Carriers or give up 2.97% 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. Star Bulk Carriers
Performance |
| Timeline |
| Global Ship Lease |
| Star Bulk Carriers |
Global Ship and Star Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Star Bulk
The main advantage of trading using opposite Global Ship and Star Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Star Bulk 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 Star Bulk will offset losses from the drop in Star Bulk'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 |
| Star Bulk vs. Genco Shipping Trading | Star Bulk vs. Diana Shipping | Star Bulk vs. Danaos | Star Bulk vs. Golden Ocean Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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