Correlation Between FIRST SHIP and Associated British
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP and Associated British 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 Associated British 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 Associated British Foods, you can compare the effects of market volatilities on FIRST SHIP and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and Associated British.
Diversification Opportunities for FIRST SHIP and Associated British
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FIRST and Associated is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of FIRST SHIP i.e., FIRST SHIP and Associated British go up and down completely randomly.
Pair Corralation between FIRST SHIP and Associated British
Assuming the 90 days horizon FIRST SHIP LEASE is expected to generate 7.51 times more return on investment than Associated British. However, FIRST SHIP is 7.51 times more volatile than Associated British Foods. It trades about 0.05 of its potential returns per unit of risk. Associated British Foods is currently generating about 0.02 per unit of risk. If you would invest 2.34 in FIRST SHIP LEASE on November 3, 2024 and sell it today you would earn a total of 0.04 from holding FIRST SHIP LEASE or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
FIRST SHIP LEASE vs. Associated British Foods
Performance |
| Timeline |
| FIRST SHIP LEASE |
| Associated British Foods |
FIRST SHIP and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SHIP and Associated British
The main advantage of trading using opposite FIRST SHIP and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| FIRST SHIP vs. BROADSTNET LEADL 00025 | FIRST SHIP vs. ADRIATIC METALS LS 013355 | FIRST SHIP vs. MAGNUM MINING EXP | FIRST SHIP vs. Yuexiu Transport Infrastructure |
| Associated British vs. National Retail Properties | Associated British vs. LOANDEPOT INC A | Associated British vs. PICKN PAY STORES | Associated British 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |