Correlation Between International Seaways and Ardmore Shpng
Can any of the company-specific risk be diversified away by investing in both International Seaways and Ardmore Shpng 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 International Seaways and Ardmore Shpng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Seaways and Ardmore Shpng, you can compare the effects of market volatilities on International Seaways and Ardmore Shpng 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 International Seaways with a short position of Ardmore Shpng. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Seaways and Ardmore Shpng.
Diversification Opportunities for International Seaways and Ardmore Shpng
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between International and Ardmore is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding International Seaways and Ardmore Shpng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardmore Shpng and International Seaways 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 International Seaways are associated (or correlated) with Ardmore Shpng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardmore Shpng has no effect on the direction of International Seaways i.e., International Seaways and Ardmore Shpng go up and down completely randomly.
Pair Corralation between International Seaways and Ardmore Shpng
Given the investment horizon of 90 days International Seaways is expected to generate 0.77 times more return on investment than Ardmore Shpng. However, International Seaways is 1.3 times less risky than Ardmore Shpng. It trades about -0.25 of its potential returns per unit of risk. Ardmore Shpng is currently generating about -0.54 per unit of risk. If you would invest 4,508 in International Seaways on August 24, 2024 and sell it today you would lose (368.00) from holding International Seaways or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Seaways vs. Ardmore Shpng
Performance |
| Timeline |
| International Seaways |
| Ardmore Shpng |
International Seaways and Ardmore Shpng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Seaways and Ardmore Shpng
The main advantage of trading using opposite International Seaways and Ardmore Shpng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Seaways position performs unexpectedly, Ardmore Shpng 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 Ardmore Shpng will offset losses from the drop in Ardmore Shpng's long position.| International Seaways vs. DHT Holdings | International Seaways vs. Teekay | International Seaways vs. HUMANA INC | International Seaways vs. Aquagold International |
| Ardmore Shpng vs. International Seaways | Ardmore Shpng vs. Scorpio Tankers | Ardmore Shpng vs. Dorian LPG | Ardmore Shpng vs. Teekay Tankers |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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