Correlation Between RETAIL FOOD and Global Ship
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and Global Ship 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 RETAIL FOOD and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RETAIL FOOD GROUP and Global Ship Lease, you can compare the effects of market volatilities on RETAIL FOOD and Global Ship 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 RETAIL FOOD with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and Global Ship.
Diversification Opportunities for RETAIL FOOD and Global Ship
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RETAIL and Global is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and RETAIL FOOD 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 RETAIL FOOD GROUP are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and Global Ship go up and down completely randomly.
Pair Corralation between RETAIL FOOD and Global Ship
Assuming the 90 days trading horizon RETAIL FOOD is expected to generate 2.01 times less return on investment than Global Ship. In addition to that, RETAIL FOOD is 1.48 times more volatile than Global Ship Lease. It trades about 0.03 of its total potential returns per unit of risk. Global Ship Lease is currently generating about 0.08 per unit of volatility. If you would invest 1,477 in Global Ship Lease on September 15, 2024 and sell it today you would earn a total of 597.00 from holding Global Ship Lease or generate 40.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. Global Ship Lease
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| Global Ship Lease |
RETAIL FOOD and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and Global Ship
The main advantage of trading using opposite RETAIL FOOD and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
| Global Ship vs. SPARTAN STORES | Global Ship vs. Consolidated Communications Holdings | Global Ship vs. Zoom Video Communications | Global Ship vs. RETAIL FOOD 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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