Correlation Between FIRST SHIP and Corporate Travel
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP and Corporate Travel 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 FIRST SHIP and Corporate Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SHIP LEASE and Corporate Travel Management, you can compare the effects of market volatilities on FIRST SHIP and Corporate Travel 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 FIRST SHIP with a short position of Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and Corporate Travel.
Diversification Opportunities for FIRST SHIP and Corporate Travel
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIRST and Corporate is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man and FIRST 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 FIRST SHIP LEASE are associated (or correlated) with Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of FIRST SHIP i.e., FIRST SHIP and Corporate Travel go up and down completely randomly.
Pair Corralation between FIRST SHIP and Corporate Travel
Assuming the 90 days horizon FIRST SHIP LEASE is expected to generate 4.46 times more return on investment than Corporate Travel. However, FIRST SHIP is 4.46 times more volatile than Corporate Travel Management. It trades about 0.05 of its potential returns per unit of risk. Corporate Travel Management is currently generating about -0.01 per unit of risk. If you would invest 2.50 in FIRST SHIP LEASE on October 16, 2024 and sell it today you would lose (0.16) from holding FIRST SHIP LEASE or give up 6.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SHIP LEASE vs. Corporate Travel Management
Performance |
| Timeline |
| FIRST SHIP LEASE |
| Corporate Travel Man |
FIRST SHIP and Corporate Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SHIP and Corporate Travel
The main advantage of trading using opposite FIRST SHIP and Corporate Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP position performs unexpectedly, Corporate Travel 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 Corporate Travel will offset losses from the drop in Corporate Travel's long position.| FIRST SHIP vs. Harmony Gold Mining | FIRST SHIP vs. MCEWEN MINING INC | FIRST SHIP vs. CN MODERN DAIRY | FIRST SHIP vs. GWILLI FOOD |
| Corporate Travel vs. FIRST SHIP LEASE | Corporate Travel vs. FUYO GENERAL LEASE | Corporate Travel vs. ALBIS LEASING AG | Corporate Travel vs. Apollo Investment Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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